An Introduction To Finance And Management For RBI Grade B Phase 2 | RBI Grade B Mains

The Finance & Management Section is one of the two subject-oriented papers in RBI Grade B Mains. The RBI evaluates the candidate’s knowledge in the area of finance and management through this section. Hence, it is a bit on the tricky side for the candidates who are from non-finance and non-management backgrounds. However, the brighter side is the fact that the topics included in the syllabus are not extremely deep into the subject. But an exhaustive coverage over the foundational level on all the topics is a must for scoring high in this subject.

This article covers the answers to all the key areas concerning the Finance and Management Section For RBI Grade B Phase 2. Let’s get started:

What are the topics to cover in the Finance & Management (FM) section for RBI Grade B Mains Exam?

The topics covered in the FM section for RBI Grade B Mains Exam are broadly divided into Finance and Management.

Finance

Financial System

  • Regulators of Banks & Financial Institutions
  • Functions of RBI, the conduct of monetary policy, the Banking system of India, Financial Institutions (SIDBI, NABARD, EXIM, NHB)

Financial Markets

  • Primary & Secondary markets (Forex, Money, Bond, Equity), Functions, Instruments, Recent developments.

General Topics

  • Risk Management in the Banking sector
  • Basics of Derivatives: Forward, Futures, and Swap
  • Changing Landscape of Banking sector
  • Recent developments in the Financial sector, Portfolio investment, Public sector reforms, Disinvestments
  • Financial Inclusion – Use of technology
  • Alternate source of finance, private and social cost-benefit, Public-Private partnership
  • Corporate Governance in the Banking sector, the role of e-governance in addressing the issues of corruption & inefficiency in the government sector
  • The Union budget – Direct and indirect taxes; Non-tax sources of Revenue, GST, 13th Finance Commission and GST, Finance Commission, Fiscal policy, Fiscal responsibility, and budget management act
  • Inflation: Definition, trends, estimates, consequences, and remedies: WPI, CPI – components of trends

Management

Management

  • Nature & Scope
  • Processes (Planning, Organizing, Staffing, Directing, Controlling)
  • Role of a Manager in an organization

Leadership

  • Tasks of a leader
  • Styles & theories
  • Successful vs Effective leader
  • Human Resource Development:
  • Concepts & goals of HRD
  • Performance appraisal – Potential appraisal & development – Feedback & Performance counseling – Career planning – Training & development – Rewards – Employee welfare.

Motivation

  • Theories
  • Morale & Incentive
  • How managers motivate
  • Morale concept
  • Factors influencing morale
  • Role of incentives in building up morale

Communication

  • Steps in the communication process
  • Communication channels
  • Communication types: Oral vs Written; Verbal vs Non-verbal; Upward, downward & lateral
  • Role of IT
  • Barriers to communication

Corporate Governance

  • Mechanisms
  • Factors affecting corporate governance

Which are the best books for the Finance & Management (FM) section for RBI Grade B Phase 2 Exam?

The following books may be referred to cover this topic exhaustively:

  • An introduction to Economics – A W Stonier and DC Hauge
  • Monetary Theory and Public Policy – Kenneth Kurihara
  • Indian Economy – Mishra and Puri
  • Indian Economy – R. Dutt and KPM Sundaram
  • Economic Growth and Development – Mayer and Baldwin
  • Major economic newspapers and Economic and Political Weekly
  • Public Finance – K K Andley and Sundaram
  • Financial Management – Prasanna Chandra

What are some important resources that can be referred for the FM section for RBI Grade B Exam?

In addition to the above booklist, some additional resources that be referred for the preparation of FM Section for RBI Grade B Exam are:

  • RBI Circulars
  • Editorial Section of The Economic Times
  • FAQ section of important bank websites namely SIDBI, NABARD, RBI, EXIM
  • Daily Current Affairs Analysis
  • NCERT Business Studies (Class 11th and 12th)
  • IGNOU BBA and MBA Notes - Relevant topics related to syllabus

What are the question types to prepare for FM Section For RBI Grade B Exam?

The paper of the Finance & Management in RBI Grade B Mains Exam will consist of 65 questions carrying 100 marks. The duration of the paper is 90 minutes. It is an objective type paper, wherein each question will have one correct answer. The break-up of FM paper in RBI Grade B Mains is given below:

Particulars Number of Questions Total Marks
2-mark questions 35 70
1-mark questions 30 30
Total 65 100

Following is an example of a question that may be asked in FM paper:

Q. Which of these techniques is used to evaluate an employee individually?

A. Ranking
B. Paired Comparision
C. Forced Distribution
D. Graphic Rating Scale

Answer: D: Graphic Rating Scale

Preparation Strategy For FM Section for RBI Grade B Exam

FM section is one of the most important sections for RBI Grade B Exam. You need to cover it exhaustively to get a high score. Scoring in Phase II is extremely crucial as it determines the final rank. The aspirants who are from non-finance or non-management background can follow these steps to master their concepts:

Step 1: If you’re from a non-finance background then, the key to master this paper is to start preparing early. Give at least 3-4 months for the preparation of this section. First and foremost, make a proper schedule and ensure you follow it thoroughly. At this time, glace through previous year question papers to get an idea of the type of questions asked.

Step 2: Make sure you have your basics clear. Even if you’re a management student, make sure to brush your concepts well. You can do so by referring to NCERTs and IGNOU notes.

Step 3: Start out by reading basic books on Management and Finance. The best can be Principles of Management by L.M. Prasad and Financial Management by Prasanna Chandra.

Step 4: Read additional resources to supplement your knowledge. It will also help you in gaining a better understanding of these topics. Also, it will help you in preparing for the interview simultaneously. Go through editorials and banking-centric current affairs analysis to get complete coverage of this section.

Step 5: Practice lots and lots of MCQ, start with solving previous year questions. Then solve mock tests, appear for weekly or monthly mock tests to assess your preparation and also to know where you stand amongst your peers. Reflect on where you’re going wrong to finetune your way forward!

Want to know the preparation strategy for Economic & Social Issues Section? Check it out here!

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