Every year lakhs of students appear for exams conducted by IBPS and SBI. These bank exam aspirants, even the ones enrolled in an IBPS coaching institute, often find the GK section of the exam a challenging task to deal with. This section seems like an ocean with no boundaries in sight and the depth of which can’t be measured. However, GK questions which appear in any IBPS Bank PO or clerk exam are not chosen at random. There is a certain thought process because of which these questions find a place in the exams. Through these questions the exam setter tries to examine an aspirant understands of banking fundamentals and his/her awareness of the external environment (the world around us). In fact, it is clearly mentioned in each IBPS exam notification that GK section will have a special emphasis on banking industry. Therefore, one must be thorough with the information pertaining to banking industry.
Banking awareness is an area which can fetch a lot marks for any aspirant and can drive up his/her aggregate score. This area alone can help one clear the cut-off for the GK section. Banking awareness, as it is generally referred to, focuses on the following aspects-
1. Monetary Policy: The fundamentals of monetary policy and RBI’s role in regulating the monetary policy should be understood. Questions on Repo rate, Reverse repo rate, Cash Reserve Ratio, Statutory Liquidity Ratio, Open Market Operations, Liquidity Adjustment Facility, Marginal Standing Facility etc. are repeatedly asked in the exams. Conceptual understanding of monetary policy in the context of prevailing macroeconomic conditions is an absolute must for any aspirant.
2. Indian Banking System: Indian banking system is vast and has a lot of diversity in it. A variety of institutions such as scheduled commercial banks, development banks, co-operative banks etc. come under this umbrella. Apart from these institutions NBFCs, though not a part of formal banking system, are also closely linked to it. Knowing what these institutions are and how they differ from one another is vital from the exam perspective.
3. Regulatory Framework: RBI, undoubtedly, has a pivotal role as the regulator of banking system and monetary policy in India. However, other financial market regulators such as SEBI, IRDA, Forward Markets Commission, Pension Fund Regulatory and Development Authority, etc. can’t be neglected. An aspirant should learn the roles and responsibilities of the regulatory institutions as well. When these regulators came into existence and where they are located are certain questions which have been there in the exams in the past.
4. Banking & Financial Terms: Every industry has its share of technical phraseology or jargon, so is the case with financial services industry. Questions related to abbreviations which are used in the field of banking and finance is quite common. One must definitely memorize the full forms of abbreviations or acronyms such as-
- SWIFT- Society for Worldwide Interbank Financial Telecommunication
- MSS- Market Stabilization Scheme
- FCCB- Foreign Currency Convertible Bonds
- ECB- External Commercial Borrowings
- FRBM- Fiscal Responsibility and Budget Management
- NEFT- National Electronic Funds Transfer
- RTGS- Real Time Gross Settlement
- IFSC- Indian Financial System Code
- CIBIL- Credit Information Bureau of India Limited
- CRISIL- Credit Rating Information Services of India Limited
- MICR- Magnetic Ink Character Recognition
- ASBA- Application Supported by Blocked Amount
- CBLO-Collateralized Borrowing and Lending Obligation
- SDR- Special Drawing Rights
- LIBOR- London Inter Bank Offered Rate
5. Financial Markets: Financial markets such as capital market, money market, commodity market etc. are dynamic by nature. Keeping abreast with the latest developments taking place in these markets is essential. Moreover, one must also know the differences that exist among these markets. How the investment options or instruments are structured in these markets and what their special characteristics are should be given emphasis. Questions on Treasury Bills, Commercial Paper, Certificates of Deposit, Shares, Debentures, Bonds, P-Notes and other financial instruments such as these are a regular feature in any IBPS exam.
6. Banking Operations: An aspirant must have elementary knowledge of banking operations. The functioning of a bank, the various types of accounts it offers and the salient features of these accounts are some basic fundamentals of banking operations. One must also learn about the services provided by banks such as loans, cheques, drafts, fund transfer, currency conversion etc.
Finally if one prepares for the exam taking into consideration all these aspects, then success in the GK section is assured whether one attends IBPS coaching classes or not. One will definitely be able to increase one’s IBPS PO GK score by at least 70%.