IBPS PO General, Banking And Economy Awareness Flashcards

24 sample cards from the General, Banking And Economy Awareness deck

Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.

1. Name the five members (founding) of the BRICS grouping and the bank associated with it.

   BRICS founding members are Brazil, Russia, India, China and South Africa. The associated bank is the New Development Bank (NDB), headquartered in Shanghai, China, which finances infrastructure and sustainable development projects in member and emerging economies.

2. What is the difference between the Capital Market and the Money Market?

   The capital market deals in long-term funds/securities (maturity over 1 year) such as shares, bonds, and debentures, traded on stock exchanges. The money market deals in short-term funds (maturity up to 1 year) through instruments like Treasury Bills, Commercial Paper, and Certificates of Deposit, and is regulated by the RBI.

3. Define Treasury Bills, Commercial Paper, and Certificate of Deposit as money market instruments.

   Treasury Bills (T-Bills): short-term debt issued by the Government of India at a discount (91, 182, 364-day tenors). Commercial Paper (CP): unsecured short-term promissory note issued by creditworthy corporates to raise working capital. Certificate of Deposit (CD): negotiable short-term instrument issued by banks/financial institutions against deposited funds.

4. What is the difference between equity shares and preference shares?

   Equity (ordinary) shareholders are owners with voting rights and receive dividends only after preference shareholders; their returns are variable. Preference shareholders get a fixed dividend paid before equity dividends and priority in capital repayment on winding up, but typically have no voting rights.

5. What is GDP, and what is the difference between nominal GDP and real GDP?

   GDP (Gross Domestic Product) is the total market value of all final goods and services produced within a country in a given period. Nominal GDP is measured at current market prices; real GDP is measured at constant (base-year) prices, removing the effect of inflation, so it reflects true growth in output.

6. What are the three sectors of the Indian economy and what does each include?

   Primary sector: extraction of natural resources (agriculture, mining, forestry, fishing). Secondary sector: manufacturing and industry (factories, construction). Tertiary sector: services (banking, IT, trade, transport, education, healthcare). India's tertiary/services sector contributes the largest share of GDP.

7. What is the difference between Fiscal Deficit and Revenue Deficit in the Union Budget?

   Fiscal deficit = total expenditure minus total revenue excluding borrowings (it shows total borrowing needs of the government). Revenue deficit = revenue expenditure minus revenue receipts (it shows the shortfall in the government's day-to-day/current account, indicating borrowing for consumption).

8. What is the difference between Direct Tax and Indirect Tax, with examples of each?

   A direct tax is levied directly on income/wealth of a person/entity and cannot be shifted to another (e.g., Income Tax, Corporate Tax). An indirect tax is levied on goods and services and the burden can be passed on to the consumer (e.g., GST, Customs Duty).

9. What is GST and what are its main components (types)?

   GST (Goods and Services Tax), launched on 1 July 2017, is a unified indirect tax on the supply of goods and services with the principle 'One Nation, One Tax'. Its components are CGST (Central GST), SGST (State GST) for intra-state sales, IGST (Integrated GST) for inter-state sales, and UTGST for Union Territories. It is governed by the GST Council.

10. What does the Pradhan Mantri Mudra Yojana (PMMY) provide and what are its three loan categories?

    PMMY provides collateral-free loans up to Rs 10 lakh to non-corporate, non-farm micro and small enterprises through MUDRA (Micro Units Development and Refinance Agency). Its three categories are: Shishu (up to Rs 50,000), Kishore (Rs 50,000 to Rs 5 lakh), and Tarun (Rs 5 lakh to Rs 10 lakh).

11. What is the objective of the Atal Pension Yojana (APY)?

    APY is a government-backed pension scheme mainly for workers in the unorganised sector. Subscribers contribute regularly and receive a guaranteed fixed monthly pension of Rs 1,000 to Rs 5,000 after age 60, depending on their contribution and joining age. It is administered by PFRDA.

12. What is the Consumer Price Index (CPI), and which body releases it in India?

    The CPI measures the average change over time in prices paid by consumers for a basket of goods and services; it is the main gauge of retail inflation and the MPC's target measure. In India, CPI is released by the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI).

13. What is the difference between WPI and CPI as inflation indices?

    WPI (Wholesale Price Index) measures price changes of goods at the wholesale/producer level and excludes services. CPI (Consumer Price Index) measures retail price changes paid by consumers and includes services. The RBI's inflation target is based on CPI; WPI is compiled by the Office of the Economic Adviser, DPIIT.

14. What is the Human Development Index (HDI) and which organisation publishes it?

    The HDI is a composite index measuring a country's average achievement in three dimensions: a long and healthy life (life expectancy), knowledge (education/schooling), and a decent standard of living (Gross National Income per capita). It is published annually by the UNDP (United Nations Development Programme) in its Human Development Report.

15. What does a country's Forex (foreign exchange) reserves consist of?

    Foreign exchange reserves consist of four components: foreign currency assets (FCA), gold reserves, Special Drawing Rights (SDRs) held with the IMF, and the Reserve Tranche Position (RTP) in the IMF. In India, these reserves are held and managed by the RBI.

16. What is a Special Drawing Right (SDR) and who issues it?

    An SDR is an international reserve asset created and allocated by the IMF to supplement member countries' official reserves. Its value is based on a basket of major currencies — the US dollar, euro, Chinese renminbi, Japanese yen and British pound. It is not a currency but a claim on freely usable currencies.

17. What is the difference between the Sensex and the Nifty?

    The Sensex (S&P BSE Sensex) is the benchmark index of the Bombay Stock Exchange (BSE), tracking 30 large, well-established companies. The Nifty 50 is the benchmark index of the National Stock Exchange (NSE), tracking 50 large companies across sectors. Both reflect overall market performance.

18. What is a Repo transaction in the context of the money market (G-Sec) collateral?

    A repo (repurchase agreement) is a short-term borrowing where a party sells government securities to a lender with an agreement to repurchase them at a slightly higher price on a future date. The price difference represents the interest. It is used by the RBI to inject liquidity into the banking system.

19. What is the Bank Rate and how does it differ from the Repo Rate?

    The Bank Rate is the rate at which the RBI lends long-term funds to commercial banks without collateral/security, and it is used as a penal rate (linked to MSF). The Repo rate is for short-term lending against the collateral of government securities. The Bank Rate is typically aligned with the MSF rate.

20. What is Open Market Operations (OMO) and how does it control liquidity?

    OMO refers to the RBI's buying and selling of government securities in the open market. When the RBI buys securities, it injects liquidity (money supply rises); when it sells securities, it absorbs liquidity (money supply falls). It is a key quantitative tool to manage liquidity and interest rates.

21. What is the difference between 'devaluation' and 'depreciation' of a currency?

    Devaluation is a deliberate, official lowering of a currency's value by the government/central bank under a fixed exchange-rate system. Depreciation is a market-driven fall in a currency's value relative to others under a floating exchange-rate system, due to supply and demand.

22. What is the DICGC and how much bank deposit does it insure per depositor?

    DICGC (Deposit Insurance and Credit Guarantee Corporation) is a wholly-owned subsidiary of the RBI that insures bank deposits. It insures deposits up to Rs 5 lakh per depositor per bank (covering principal and interest), protecting depositors if a bank fails.

23. What does NPCI stand for and name three products it operates.

    NPCI = National Payments Corporation of India, the umbrella organisation for retail payments and settlement systems in India, promoted by RBI and banks. Its key products include UPI (Unified Payments Interface), IMPS (Immediate Payment Service), RuPay card, BHIM, NACH (National Automated Clearing House), and FASTag.

24. What is Basel III and which area of banking does it primarily address?

    Basel III is a set of international banking regulatory standards issued by the Basel Committee on Banking Supervision (BCBS) to strengthen bank capital adequacy, stress testing, and liquidity. It primarily addresses capital requirements (e.g., Capital to Risk-weighted Assets Ratio / CRAR) and liquidity buffers to make banks more resilient to financial shocks.

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General, Banking And Economy Awareness flashcards FAQ