RBI Grade B: Finance and Management

This is the first part of a series of article to discuss Phase 2 (RBI mains) preparation strategy. In this article Finance and Management (paper 3 of phase 2) strategy is discussed. Most students face problems in this section of the paper (especially “non-MBA” candidates). But contrary to believe it is very easy to score in this paper. The structure of this article is as follow:

1) Analysis of finance part of paper III.

2) Major insights which can be drawn from the analysis

3) Segregation of RBI grade b syllabus on basis of topic. This will help in chalking out a study plan.

4) A glimpse of study plan is covered; the full study plan will be shared in another article.

Background

RBI Grade b recruitment process consists of three phases.

There is usually 15 days window between Phase 1 and Phase 2 exam. So exam preparation for Phase 1 and Phase 2 exam should be done simultaneously. Initially, the major focus should be on Phase 2 and then the focus should shift to Phase 1 prior to 2-month of Phase 1 Examination.

RBI grade B Exam Pattern for Phase-II Paper is as under.

In Paper 3 almost equal weight-age is given to RBI Grade B Finance and Management part (Organisation behavior, Human Resource Management, Corporate Governance etc.)

                                                   * Corporate Governance questions are considered part of Management part.

Here only the Finance part is discussed.

Finance Part of Paper III

Total 31 questions of 48 marks were asked in this part. There were 17 questions of two marks each and rest were one marks questions. There were around 5-6 numerical in this part. And rest are conceptual. You can find list of questions in end of this article.

This part can be broadly divided under following heads

Topic wise Breakup of question is depicted in following graph.

Individual Analysis

Financial Markets (Total 11 questions; 17 marks)

Broad categorization of questions

Both the bond market and Stock market covered and 5 questions from each have been asked. While only one question is asked from the derivative market. One can easily do all these questions if one has covered the NCFM module from NSE.

RBI grade b advertisement (Notification) clearly mentioned about this part of the syllabus and most of the questions are from their only. Why RBI gave so much weight-age to this part- don’t know (only either God or Mr UP knows :)). But perhaps it may be due to present government inclination towards the development of stock and bond market. So much in the news that why they have asked. Also, information handout also having these type of questions.

So prepare all the technical stuff which is in news prior to the examination.  For Example: if Option market (Call or Put Option) is in news prior to exams then one should prepare its basic technical details like how they are priced, their types etc.

 

RBI/Banking/ Bank Regulation (Total 8 Ques; 11 marks)

“Detail Study matters: If you carelessly observed the paper it seems that nothing is asked from the economy survey. But if one study economy survey then he can answer many of these questions. For example, there is a question on RWA (Risk-weighted Average) which one can easily answer if one know the reason why the capitalization of the bank is needed which is mentioned in the economic survey. It is required to comply with Basel norms. If one knows the BASEL norms he knows about RWA. So cover the Economy survey in detail. This will also help in Phase 1 and Phase 2 – Paper-1 (ESI) “

Every serious aspirant who had gone through RBI website should be able to do RBI function and interest rate questions. Further if one knew about the BASEL norm he can easily answer the question-related banking financial statements question like the full form of RWA and ICAAP.

 

Management Accounting (Total 7 questions; 13 marks)

Any company has three Financial (Balance Sheet, Profit & Loss Account and Cash flow statement) if one knows about their analysis then can easily answer 6 out of 7 questions.

This part is a surprise for non-MBA people. If one has gone by only the syllabus provided in notification no one can guess these types of questions can come into RBI grade B finance examination. But if one looked into information handout provided by RBI, then these types of questions are quite probable.

So remember to see the information handout before any examination. Then we can escape from the surprises during RBI grade B finance examination.

 

Miscellaneous  (5 questions; 7 marks)

Here are few miscellaneous questions which I have put in the separate head

1) Numerical based on Compounding concept (perhaps compounding interest)

2) Year of the 1st five-year plan

3) Who is Mutual fund regulator

4) Some question related to Outbound liability (OBL) <there are two questions, but not clear>.

 

Major insights

1) Read the information Handout provided for the exam.

2) Prepare all type of question asked in that handout on priority and the complete topic mentioned in notification later.

3) Many of questions can be easily answered after studying few basic MBA finance courses. The study material for them will be uploaded soon. To study the MBA course may seems to be huge task but it will only take 3-4 weeks to study the relevant portion from those courses.

4) Financial market questions were most in number as well in term of marks weightage. NCFM material should be enough for this. I will look into it and then upload the same.

5) No questions or very few questions were asked on many topics like only one question on regulator other than RBI, no question on financial inclusion, PPP, alternative source of finance, Union Budget etc.

6) RBI provided a list of books to prepare for RBI exam. But the book list is huge and not easy to understand. To cover all the topics, one should more rely on an internet blog.

So now how to prepare for exam then? Here first I will discuss the segregation of syllabus and target each topic individually.

 

Study Plan

The Whole of Finance part of paper 3 can be segregated into the following head