Banking Awareness PYQs

The correct answer is 1^st.

In News

• India ranks 1^st globally in AI skill penetration per Stanford AI Index 2024, leading also in women's AI skills.

Key Points

• India tops AI skill penetration with a score 2.8 in the Stanford AI Index 2024, ahead of USA (2.2) and Germany (1.9).
• India leads women's AI skill penetration with score 1.7, surpassing USA (1.2) and Israel (0.9), promoting gender inclusion.
• IndiaAI Mission (Rs 10,300 crore over 5 years) by MeitY provides 18,693 GPUs computing capacity (9x DeepSeek).
• Three AI Centres of Excellence established: healthcare (IIT Delhi-AIIMS), agriculture (IIT Ropar), and sustainable cities (IIT Kanpur).
• Fourth CoE for education announced in Budget FY26 with Rs 500 crore outlay for sectoral AI applications.
• BHASHINI enables language translation, BharatGen multimodal LLM, and Sarvam-1 supports 10 Indian languages.
• India represents 16% global AI talent, among the top 5 fastest-growing AI talent hubs worldwide.

Additional Information

• IndiaAI Mission aligns with Viksit Bharat 2047 vision, establishing global AI leadership.
• GPU marketplace offers subsidised access at Rs 100/hour vs global USD 2.5-3 rates.
• Five semiconductor plants under construction strengthen AI hardware ecosystem domestically.
• AI economy projected to grow at 25-35% CAGR reaching USD 28.8 billion by 2025.

The correct answer is Rs 370.

In News

• In March 2025, the Ministry of Rural Development (MoRD) revised the MGNREGA daily wage rate from Rs 349 to Rs 370 per person for Financial Year 2025–26 (FY26).

Key Points

• MGNREGA wages have been increased to Rs 370 per day for FY26.
• The previous wage was Rs 349 per day.
• The revised wage is effective from April 1, 2025, the beginning of Financial Year 2025–26.
• The notification was issued by MoRD under sub-section (1) of Section 6 of MNREGA, 2005.

Additional Information

• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
• Enacted in 2005 to guarantee 100 days of wage employment in a financial year to rural households.
• Provides employment opportunities through unskilled manual work.
• Wage Revision
• Wages are revised annually by the Ministry of Rural Development.
• Based on Consumer Price Index for Agricultural Labourers (CPI-AL).
• Implementation
• Effective from April 1, 2025, marking the start of FY26.
• Aims to support rural livelihoods and boost rural consumption.

The correct answer is MuleHunter.AI.

In News

• RBIH launched MuleHunter.AI, an AI/ML model for detecting and mitigating mule accounts in financial frauds.

Key Points

• MuleHunter.AI surpasses traditional rule-based systems using machine learning for precision and speed in detection.
• It processes transaction data and account details to predict mule accounts and track illicit fund flows accurately.
• The model was developed by analysing 19 distinct mule account activity patterns in collaboration with multiple banks.
• Pilot testing with two public sector banks demonstrated significantly improved detection rates and effectiveness.
• Banks are encouraged to collaborate with RBIH to expand MuleHunter.AI across the financial ecosystem.
• It enhances cybersecurity and cyber fraud prevention through advanced transaction monitoring capabilities.
• The tool represents a transformative step towards a safer and more resilient financial ecosystem.

Additional Information

• Mule accounts are used to launder illicit cybercrime proceeds through unsuspecting individuals.
• RBIH fosters fintech innovation and regulatory technology solutions for financial inclusion.
• AI/ML significantly reduces false positives compared to traditional fraud detection systems.
• Regulator-bank-fintech collaboration strengthens the digital payments security framework.
• Reserve Bank Innovation Hub
• Established in - 2022
• HQ - Bengaluru

The correct answer is Rs 1 crore.

In News

• RBI proposed Rs 1 crore as the bulk deposit limit for Local Area Banks in June 2024 draft regulations.

Key Points

• RBI's draft regulations define bulk deposits for Local Area Banks as single-term deposits of Rs 1 crore or above with a maturity of one year.
• The revision aligns LABs' regulatory framework with commercial banks to maintain financial stability.
• Bulk deposits attract higher interest rates but carry greater liquidity risk management requirements.
• Local Area Banks operate in specific geographic regions serving underserved banking areas.
• The definition harmonisation facilitates uniform interest rate disclosure and customer protection.
• It enhances LABs' deposit mobilisation capabilities while ensuring prudential liquidity norms compliance.
• Stakeholder comments were invited to refine the final regulatory framework before implementation.

Additional Information

• Local Area Banks follow a hybrid commercial-cooperative model for specific regions exclusively.
• Bulk deposits are reported separately for liquidity coverage ratio calculations.
• RBI periodically reviews deposit classification thresholds based on market dynamics.
• Interest rate caps on bulk deposits prevent unhealthy competition and ensure stability.
• RBI
• Established in - 1935
• HQ - Mumbai
• Governor - Sanjay Malhotra

The correct answer is Pradhan Mantri Virasat Ka Samvardhan.

In News

• PM VIKAS was launched as an integrated scheme titled ‘Pradhan Mantri Virasat Ka Samvardhan’ by the Ministry of Minority Affairs.

Key Points

• PM VIKAS expands to Pradhan Mantri Virasat Ka Samvardhan, emphasising the preservation and advancement of the cultural ‘virasat’ (heritage) of minority communities.
• The scheme integrates five earlier schemes of the Ministry of Minority Affairs into a single umbrella for better convergence and implementation.
• Its focus is on skilling, economic empowerment, education support, and infrastructure for artisans and individuals from notified minority communities.
• The scheme aims to upgrade traditional arts and crafts through design, technology, credit support, and market linkages.
• It also seeks to enhance employability by providing training aligned with industry requirements and local livelihood opportunities.
• Target beneficiaries include minorities engaged in traditional occupations, small businesses, and skill-based livelihoods.
• Consolidation under PM VIKAS is intended to reduce overlap, improve monitoring, and ensure better outcomes at the ground level.

Additional Information

• Notified minority communities are Muslims, Christians, Sikhs, Buddhists, Parsis, and Jains.
• Earlier standalone schemes covered skill development, education, and infrastructure separately for minorities.
• PM VIKAS aligns with the broader agenda of inclusive growth and social justice.
• The scheme is implemented through state governments, training partners, and community-based institutions.

The correct answer is Asian Development Bank (ADB).

In News

• The Government of India and the Asian Development Bank signed a USD 350 million policy-based loan in December 2024 under the SMILE programme.

Key Points

• The USD 350 million loan from ADB supports the SMILE programme aimed at improving logistics efficiency and lowering logistics costs in India.
• It is a policy-based loan, meaning disbursement is linked to reform actions rather than specific investment projects.
• The programme focuses on multimodal connectivity, including better integration of road, rail, inland waterways, and ports.
• It aligns with India’s National Logistics Policy, which aims to enhance the country’s Logistics Performance Index ranking.
• Reforms supported include regulatory simplification, digital platforms for cargo movement, and improved freight planning.
• The programme seeks to promote greener logistics by encouraging modal shift to more energy-efficient transport options.
• Improved logistics are expected to boost exports, reduce supply-chain bottlenecks, and support manufacturing growth.

Additional Information

• Policy-based loans typically support structural reforms and institutional strengthening.
• The Gati Shakti National Master Plan provides an integrated platform for infrastructure planning and logistics corridors.
• Efficient logistics can significantly reduce the overall cost of doing business in the economy.
• Asian Development Bank
• Established in - 1966
• HQ - Manila, Philippines

The correct answer is Medium Term and Long Term Government Deposit (MLTGD).

In News

• The Government of India has discontinued the Medium Term and Long Term Government Deposit (MLTGD) components of the Gold Monetisation Scheme from 26 March 2025.

Key Points

• Under the decision, no fresh gold deposits are accepted under the Medium Term and Long Term Government Deposit (MLTGD) component of GMS from 26 March 2025.
• Any gold tendered at Collection and Purity Testing Centres, GMS mobilising agents, or designated bank branches under MLTGD is not to be accepted after this date.
• Existing MLTGD accounts will, however, continue till their original maturity and will be redeemed as per earlier terms.
• The renewal of MLTGD deposits has also been stopped with effect from 26 March 2025.
• Earlier in 2025, the central government had also discontinued the Sovereign Gold Bond (SGB) scheme, indicating a broader rationalisation of gold schemes.
• The move follows a review of scheme utilisation and evolving gold market dynamics.
• Short Term Bank Deposit (STBD) under GMS continues, with interest rates decided by banks and tenures of 1–3 years.

Additional Information

• GMS was launched in 2015 to mobilise idle gold held by households and institutions and reduce gold imports.
• The scheme replaced the earlier Gold Deposit Scheme, 1999.
• Eligible depositors include resident individuals, HUFs, trusts, companies, and government entities.
• Minimum deposit under GMS is 10 grams of raw gold (bars, coins, jewellery excluding stones and other metals), with no maximum limit.

The correct answer is 1 and 2 only.

In News

• On April 5, 2025, the Government of India marked 9 years of successful implementation of the Stand-Up India Scheme, launched on April 5, 2016.

Key Points

• The Stand-Up India Scheme was launched on April 5, 2016 and completed 9 years on April 5, 2025.
• It aims to promote grassroots entrepreneurship with a focus on economic empowerment and job creation.
• The scheme provides bank loans ranging from Rs 10 lakh to Rs 100 lakh to a minimum of one SC/ST and one woman borrower per Scheduled Commercial Bank (SCB) branch.
• Statement 3 is incorrect: Only individuals above the age of 18 years are eligible under the scheme, not below 18.

Additional Information

• Stand-Up India Scheme
• Launched by the Government of India on April 5, 2016.
• Focuses on promoting entrepreneurship among SC/ST and women communities.
• Offers institutional credit from Rs 10 lakh to Rs 100 lakh for setting up new enterprises.
• Nodal Agency
• Small Industries Development Bank of India (SIDBI), headquartered in Lucknow, Uttar Pradesh.
• Implements the scheme under the guidance of the Department of Financial Services (DFS), Ministry of Finance (MoF).
• Eligibility Criteria
• Only SC/ST or women entrepreneurs.
• Must be above 18 years of age.
• Applies to new businesses only (greenfield projects).

The correct answer is United Arab Emirates (UAE).

In News

• The UAE is the largest destination for Indian blue-collar workers, especially in construction, services, and infrastructure sectors.

Key Points

• The UAE hosts the highest number of Indian blue-collar migrant workers among GCC countries.
• Large projects in Dubai, Abu Dhabi and other emirates create demand for construction, maintenance, and service workers from India.
• Geographical proximity and strong economic links make the UAE a preferred destination for Indian workers.
• The e-Migrate portal regulates Emigration Check Required (ECR) category workers for safe migration to the Gulf countries.
• Remittances from Indian workers in the UAE significantly contribute to household incomes in several Indian states.
• Bilateral agreements between India and UAE also cover labour protection and welfare measures.
• The Indian community forms one of the largest expatriate groups in the UAE.

Additional Information

• Blue-collar jobs typically include manual and semi-skilled work in construction, manufacturing, and services.
• India has over 8 million expatriates in GCC countries.
• The Indian Community Welfare Fund supports distressed Indian nationals abroad.
• Remittances from Gulf countries are a key component of India’s private transfer receipts in the balance of payments.

The correct answer is Andhra Pradesh.

In News

• Andhra Pradesh is the leading state in palm oil production under the National Mission on Edible Oils – Oil Palm.

Key Points

• Andhra Pradesh accounts for the highest share of palm oil production in India, with extensive plantations in districts like East Godavari and West Godavari.
• The state’s favourable tropical climate and irrigation facilities support high-yield oil palm cultivation.
• Under the National Mission on Edible Oils – Oil Palm, the Centre and states are incentivising the expansion of oil palm plantations.
• Palm oil has the highest oil yield per hectare among major oil crops, improving land-use efficiency.
• Increasing domestic palm oil output is critical to reducing India’s heavy dependence on imported edible oils.
• The government provides viability gap funding and ensures assured pricing mechanisms to support farmers.
• Processing units and Farmer-Producer Organisations (FPOs) are being promoted to strengthen the value chain.

Additional Information

• India is one of the largest importers and consumers of palm oil globally.
• The National Mission on Edible Oils – Oil Palm was launched to expand oil palm area and processing capacity.
• Sustainable cultivation practices are encouraged to minimise environmental impact.
• Oil palm is a perennial crop with a productive life spanning over two decades.

The correct answer is Asian Development Bank (ADB).

In News

• The Asian Development Bank (ADB) launched the “Frontier Seed” initiative to scale private sector solutions for ocean health and resilient growth in the Pacific region.

Key Points

• “Frontier Seed” is designed to support early-stage and innovative enterprises that operate in Pacific Island countries and work on sustainable ocean and climate-resilient solutions.
• Through this initiative, ADB aims to de-risk private investments and crowd in additional capital into sectors such as sustainable fisheries, coastal protection, and ocean-based renewable energy.
• The facility targets high-impact projects that can improve livelihoods, create jobs, and protect marine ecosystems in vulnerable Pacific economies.
• It aligns with ADB’s broader Ocean Health Action Plan and climate finance commitments for small island developing states.
• Blended finance structures under Frontier Seed are expected to combine concessional resources with private equity and debt.
• The initiative also focuses on building the capacity of local entrepreneurs and strengthening regulatory environments for blue economy ventures.
• By supporting scalable business models, Frontier Seed aims to help Pacific countries leverage their ocean resources sustainably.

Additional Information

• ADB is a regional development bank headquartered in Manila, focusing on inclusive and sustainable growth in Asia and the Pacific.
• Established in - 1966
• HQ - Manila, Philippines
• The Pacific region is highly vulnerable to climate change impacts such as sea-level rise, cyclones, and coral reef degradation.
• Blue economy initiatives aim to balance economic development with the conservation of ocean and coastal ecosystems.
• Blended finance uses concessional funds to mobilise larger amounts of commercial capital for development projects.

The correct answer is Maharashtra.

In News

• The Cabinet approved construction of a 6‑lane access‑controlled greenfield highway project in the state of Maharashtra.

Key Points

• The project involves developing a new 6‑lane access‑controlled greenfield highway corridor in Maharashtra to enhance high‑speed connectivity.
• It is expected to reduce logistics costs and travel time between key industrial and agricultural regions in the state.
• The highway will be implemented under the Bharatmala or similar flagship programme for national highway expansion.
• Greenfield status means the road will be built on a new alignment rather than expanding existing routes, allowing better geometric design and safety.
• The project will include interchanges, service roads, and safety features designed for controlled access and limited entry/exit points.
• Land acquisition, environment clearance, and rehabilitation plans will be handled as per current highway development norms.
• The investment is expected to generate employment during construction and support long‑term regional economic development.

Additional Information

• Access‑controlled highways restrict entry and exit to designated points, improving safety and average travel speed.
• Greenfield projects avoid constraints of existing built‑up areas but require higher initial land and construction costs.
• Maharashtra is a leading industrial state, and improved road connectivity supports manufacturing and export competitiveness.
• Such highways also facilitate better connectivity to ports, logistics parks, and dedicated freight corridors.

The correct answer is It introduced features such as multilingual support, recurring payments, and improved security.

In News

• BHIM 3.0 was launched with enhanced digital payment features to make UPI usage more convenient, inclusive, and secure.

Key Points

• BHIM 3.0 builds on the original BHIM app by adding multilingual support to cater to a wider base of users across Indian languages.
• The upgrade includes recurring payment features, enabling users to set up automatic bill payments and subscriptions via UPI.
• Enhanced security features include better fraud alerts, improved device binding, and stronger authentication flows.
• The interface has been refined to make onboarding easier for first‑time users and to simplify payment flows.
• Integration with more banks and third‑party services helps expand the utility of BHIM beyond simple P2P transfers.
• BHIM 3.0 continues to support QR‑based payments, merchant payments, and request‑money functionalities.
• The upgrade is aligned with India’s broader push towards cashless, real‑time digital payments via UPI.

Additional Information

• BHIM (Bharat Interface for Money) is a National Payments Corporation of India (NPCI) application based on UPI.
• UPI enables instant fund transfers between bank accounts using mobile devices and virtual payment addresses.
• India is one of the world leaders in real‑time digital payments volume, with UPI as a key driver.
• Security, ease of use, and language support are critical factors for deepening digital payment adoption.
• NPCI
• Established in - 2008
• HQ - Mumbai

The correct answer is Processing.

In News

• IDPMS is an RBI‑driven online system where “P” stands for ‘Processing’ in the Import Data Processing and Monitoring System.

Key Points

• IDPMS expands to Import Data Processing and Monitoring System, highlighting its dual function of processing and monitoring import data.
• The system captures import transactions reported by banks and customs, enabling end‑to‑end tracking from shipment to payment.
• It helps banks verify whether imports are matched with corresponding remittances or trade credits within prescribed timelines.
• Businesses benefit from reduced manual paperwork and faster reconciliation of import documents with bank records.
• RBI uses aggregated data from IDPMS to track foreign exchange usage and compliance with FEMA provisions.
• The platform supports risk‑based supervision by flagging delayed or unmatched transactions for further scrutiny.
• IDPMS is integrated with the export‑side system (EDPMS) to give a full picture of India’s trade‑related foreign exchange flows.

Additional Information

• EDPMS stands for Export Data Processing and Monitoring System for export transactions.
• Digital trade monitoring systems reduce compliance costs for both banks and corporates.
• FEMA (Foreign Exchange Management Act) governs foreign exchange regulations in India.
• Such systems support data‑driven policy decisions on external sector management.
• RBI
• Established in - 1935
• HQ - Mumbai
• Governor - Sanjay Malhotra

The correct answer is Account closure after notice.

In News

• Bank account closure for non-updated KYC post-reminders.

Key Points

• Banks must send three advance reminders before the KYC due date via SMS, email, letter, or app.
• Post-due, three more reminders including a physical letter with clear update instructions.
• Non-compliance after reminders leads to account closure following additional notice.
• Audit trail records all communication attempts for regulatory compliance.
• Low-risk customers get transaction continuity until June 30, 2026, or one year post-due.
• Rural camps and awareness drives address higher pendency in semi-urban areas.
• Empathetic approach includes support escalation for customer assistance.

Additional Information

• KYC Update verifies customer identity periodically.
• Frequency - Risk-based (low: 10 years)
• Channels - Digital + physical
• RBI eased norms noting delays in government schemes and rural access issues.
• Closure prevents money laundering risks from outdated profiles.
• REs maintain records for supervisory audits.
• Periodic review every 2-10 years based on risk category.

The correct answer is RTGS high‑value real‑time payments.

In News

• India adopted the ISO 20022 standard first in its high‑value RTGS payment system for standardised messaging.

Key Points

• ISO 20022 provides a common global “language” and data model for financial messages across payment systems.
• India’s Real Time Gross Settlement (RTGS) system adopted ISO 20022 message formats for high‑value, real‑time interbank transfers.
• This adoption allows richer data fields, better reconciliation, and improved straight‑through processing compared to legacy formats.
• Standardisation helps interoperability with cross‑border payment systems that also use ISO 20022.
• Over time, other payment and securities systems in India are aligning with ISO 20022‑based formats.
• Banks upgraded their core systems and middleware to support the new structured messaging requirements.
• Migration to ISO 20022 is a global trend driven by SWIFT and major central banks for modern payment infrastructures.

Additional Information

• RTGS processes large‑value, time‑critical transactions individually and in real time.
• ISO 20022 messages are XML‑based and allow more structured remittance information.
• Global adoption of ISO 20022 improves transparency and compliance in cross‑border payments.
• Standardised messaging reduces operational risk and manual intervention in back‑office processing.

The correct answer is USD 682.59 billion.

In News

• India’s overall exports (merchandise plus services) in 2024 were reported at USD 682.59 billion.

Key Points

• The combined export figure of USD 682.59 billion includes both merchandise exports and services exports.
• Services exports such as IT, business process management, and professional services contributed significantly to the total.
• Merchandise exports included sectors like engineering goods, petroleum products, chemicals, and agriculture.
• The performance reflects efforts to diversify export destinations and reduce over‑reliance on a few markets.
• Government schemes like RoDTEP, PLI, and export credit support have helped exporters remain competitive.
• Trade agreements and negotiations aim to secure better market access for Indian products and services.
• Export growth is crucial for managing the current account and generating foreign exchange reserves.

Additional Information

• India’s services exports often generate a surplus that partially offsets merchandise trade deficit.
• IT and IT‑enabled services remain a major driver of export earnings.
• Export performance is sensitive to global growth, commodity prices, and currency movements.
• Policy focus on “Atmanirbhar Bharat” also emphasises boosting high‑value exports.

The correct answer is A traditionally low‑ranked, regulation‑heavy economy.

In News

• Startup‑friendly countries typically feature strong innovation ecosystems, whereas heavily regulated, low‑ranked economies are considered less startup‑friendly.

Key Points

• The United States, India, Israel, and Singapore are consistently highlighted among leading startup ecosystems globally.
• They provide venture capital availability, incubators, accelerators, and favourable regulatory frameworks for innovation.
• Countries with cumbersome regulations, weak investor protection, and limited innovation infrastructure tend to rank lower on startup friendliness.
• Such economies often face brain drain, limited access to risk capital, and slower technology adoption.
• Global indexes typically classify them lower due to barriers in ease of doing business and market entry.
• Policy reforms in these countries are often aimed at improving the business climate to attract startups and investors.
• In contrast, established hubs actively market themselves as destinations for global startups and tech talent.

Additional Information

• Startup ecosystem rankings usually consider funding, market reach, talent, and infrastructure.
• Regulatory over‑complexity discourages entrepreneurship and the formalisation of new businesses.
• Government‑supported incubators and accelerators can significantly improve a country’s startup attractiveness.
• Stable macroeconomic conditions also matter for startup investment decisions.

The correct answer is Rs 5 crore.

In News

• The minimum paid‑up capital requirement for a Local Area Bank (LAB) in India is Rs 5 crore.

Key Points

• Local Area Bank (LAB) were conceptualised to operate in limited geographical areas and focus on local savings and credit needs.
• The prescribed minimum paid‑up capital for a LAB is Rs 5 crore, ensuring a basic level of financial strength.
• These banks are expected to maintain adequate capital adequacy and follow prudential norms like other commercial banks.
• They are usually allowed to operate in a maximum of three geographically contiguous districts.
• LABs mobilise deposits from local communities and lend primarily to agriculture, small industry, and rural households.
• They are supervised by the Reserve Bank of India under applicable banking regulations.
• The model aims to supplement the outreach of larger commercial and regional rural banks in specific pockets.

Additional Information

• Capital requirements help absorb potential losses and protect depositors’ interests.
• LABs are registered as public limited companies under the Companies Act in addition to holding a banking licence.
• Their operations must comply with reserve requirements and priority sector lending norms, where applicable.
• Local‑focused banks are part of broader financial inclusion strategies in India.

The correct answer is Odisha.

In News

• Dr. Arvind Panagariya, Chairman of the 16^th Finance Commission, released NITI Aayog’s ‘Fiscal Health Index (FHI) 2025’, where Odisha ranked 1^st with a score of 67.8.

Key Points

• The FHI 2025 evaluates the fiscal health of 18 major states across parameters like expenditure quality, revenue mobilisation, prudence, and debt sustainability.
• Odisha topped the rankings with an overall score of 67.8, followed by Chhattisgarh (55.2) and Goa (53.6).
• The Achiever category (FHI score > 50) includes Odisha, Chhattisgarh, Goa, Jharkhand (51.6), and Gujarat (50.5).
• Top states typically have higher capital outlay of up to 4% of GSDP, revenue surplus, and low interest payments (around or below 7% of revenue receipts).
• Front Runner states like Maharashtra, Uttar Pradesh, Telangana, Madhya Pradesh, and Karnataka report high developmental expenditure (up to 73%) and improved debt metrics.
• Performer states include Tamil Nadu, Rajasthan, Bihar, and Haryana with moderate scores.
• Aspirational states such as Kerala, West Bengal, Andhra Pradesh, and Punjab have weaker indicators with higher debt burdens and difficulty meeting deficit targets.

Additional Information

• The FHI uses data from the Comptroller and Auditor General (CAG) and other official sources.
• It groups states into four bands: Achiever (>50), Front Runner (40–50), Performer (25–40), and Aspirational (≤25).
• Key sub‑indices include Quality of Expenditure, Revenue Mobilisation, Fiscal Prudence, Debt Index, and Debt Sustainability.
• The index is intended to help policymakers identify strengths and weaknesses in state‑level fiscal management.