Central Banking Syllabus Priority 2024
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Central Banking (Elective) — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary mandate of the Reserve Bank of India as a central bank?
The primary mandate of RBI is to maintain monetary stability, manage currency, regulate the financial system, and act as banker to the government and commercial banks.
What is the primary tool used by RBI to absorb excess liquidity in the banking system?
Reverse Repo under Liquidity Adjustment Facility (LAF)
Which committee recommended the current monetary policy framework in India?
The Urjit Patel Committee (2014) recommended the adoption of a flexible inflation targeting framework, which was subsequently enshrined in the RBI Act via the 2016 amendment.
What is the Statutory Liquidity Ratio (SLR) and what assets qualify for its maintenance?
Minimum liquid assets (gold, cash, approved securities) banks must hold
What is the statutory target for CPI inflation under India's monetary policy framework?
The statutory target is 4% CPI inflation with a tolerance band of +/- 2%, meaning inflation should remain between 2% and 6%.
What is the Marginal Standing Facility (MSF) and how does it differ from the repo rate?
Overnight borrowing above repo rate, currently 25 bps higher than repo
How many members constitute the Monetary Policy Committee (MPC) of RBI?
The MPC has six members — three from RBI (including the Governor as Chair) and three external members appointed by the Government of India.
What is the difference between 'accommodative' and 'hawkish' monetary policy stances?
Accommodative favors growth via rate cuts; hawkish targets inflation via rate hikes
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