Banking Knowledge for SBI CBO 2025, Check Important Topics

The State Bank of India conducts various recruitments for Circle-based Officers across India. The SBI CBO exam is expected to be held in July 2025. The candidates who are appearing in this exam must go through the important topics of Banking Knowledge. The banking knowledge section is an important part of the SBI CBO online test. It consists of 40 questions of 40 marks to be completed in 40 40-minute sessions. Increasing your knowledge in the banking subject will eventually lead you to achieve better in the overall score. In this blog, we are discussing the important banking knowledge topics that you need to prepare for the upcoming SBI CBO exam.

SBI CBO 2025 Exam Overview

The overview table for the SBI CBO exam covers exam name, conducting body, post, category, salary, job type, selection process, eligibility, and posting.

Banking Knowledge Important Topics for SBI CBO Exam

Important banking knowledge topics for the SBI CBO exam include banking terminologies, banking structure in India, financial structure, banking acts, and reforms, digital banking, government schemes, banking abbreviations, recent banking updates, and lending and advances.

The Banking Knowledge section is the most important as well as the most scoring in the SBI CBO exam. It consists of 40 questions of 40 marks of 40 minute duration. As it contains topics from static banking and recent banking updates. Let’s discuss the important topics in detail below.

Banking Terminologies

Banking Terminologies cover topics like NPA, CASA, CRR, SLR, Repo, Reverse Repo, Bank Rate, MSF, Base Rate, and MCLR. Questions can be framed in many ways around these topics. A brief intro into these topics is provided below.

NPA – An NPA or Non-performing Asset is a loan where the borrower has not paid interest or principal for more than 90 days. 

CASA – CASA stands for Current Account and Savings Account. It refers to the deposits held in these two types of accounts at a bank

CRR – CRR, or Cash Reserve Ratio, refers to the percentage of a bank’s total deposits that it must keep as reserves with the central bank (in India, the Reserve Bank of India). It’s a monetary policy tool used to manage liquidity and control inflation. 

SLR – SLR stands for Statutory Liquidity Ratio. It is a mandatory requirement for commercial banks in India, stipulating that they must hold a specific percentage of their Net Demand and Time Liabilities (NDTL) in liquid assets like cash, gold, or government securities. The Reserve Bank of India (RBI) sets and adjusts the SLR.

Repo Rate – The Repo Rate full form is Repurchase Agreement or Repurchasing Option. Banks obtain loans from the Reserve Bank of India (RBI) by selling qualifying securities. 

Reverse Repo rate – The reverse repo rate is the interest rate at which the Reserve Bank of India (RBI) borrows money from commercial banks. It’s the rate at which the RBI “parks” excess liquidity with banks. When the RBI increases the reverse repo rate, it encourages banks to lend less to businesses and individuals and instead deposit more with the RBI, effectively reducing the money supply.

Bank Rate – The bank rate is the interest rate at which a central bank, like the Reserve Bank of India (RBI), lends money to commercial banks. 

MSF – MSF stands for Marginal Standing Facility. It’s a monetary policy tool used by the Reserve Bank of India (RBI) to provide liquidity to scheduled commercial banks in times of emergency or when they are unable to borrow from other banks. Specifically, it allows banks to borrow overnight funds from the RBI by dipping into their Statutory Liquidity Ratio (SLR) portfolio. 

Base Rate – The base rate is the minimum interest rate that banks use as a benchmark for lending, below which they cannot offer loans. 

MCLR – MCLR stands for Marginal Cost of Funds-based Lending Rate. It is the minimum interest rate that a bank can charge for a specific loan. Essentially, it’s an internal benchmark rate that banks use to determine the interest rates they offer on loans, and it replaced the earlier base rate system. 

Banking Structure in India

Banking structure in India includes topics like Scheduled Banks, Commercial Banks, Cooperative Banks, RRBs, Payment and Small Finance Banks. A brief intro to these topics is provided below.

Scheduled Banks – Scheduled banks are commercial banks included in the Second Schedule of the Reserve Bank of India (RBI) Act, 1934. These banks are recognized and regulated by the RBI, meeting specific criteria laid out in the Act.

Commercial Banks – Commercial banks are financial institutions that accept deposits, provide loans, and offer other financial services to individuals and businesses, primarily for profit. They act as intermediaries between savers and borrowers, facilitating the flow of capital within the economy. 

Cooperative Banks – Cooperative banks are financial institutions that are owned and operated by their members, who are also the bank’s customers. 

RRBs – Regional Rural Banks (RRBs) are government-owned banks in India established to provide banking and credit services primarily to rural and semi-urban areas, especially to farmers, artisans, and small businesses. They operate under the joint ownership of the Central Government, State Government, and a sponsoring public sector bank.

Payment Banks – Payment Banks in India are specialized banks licensed by the RBI to provide basic banking services like deposits (up to ₹2 lakh), fund transfers, and bill payments, but they cannot offer loans or credit cards. They aim to enhance financial inclusion, especially in remote and underserved areas.

Small Finance Banks – Small Finance Banks (SFBs) in India are niche banks licensed by the RBI to provide basic banking services, especially credit and savings, to underserved sections like small businesses, farmers, and low-income households. They can accept deposits and offer loans like regular commercial banks but with a focus on financial inclusion.

Financial Structure in India

Financial Structure in India includes topics like the Role of RBI, SEBI, NABARD, SIDBI, and IRDAI. A brief introduction of these topics is provided below.

Role of RBI – The Reserve Bank of India (RBI) is the central bank of India responsible for regulating the monetary policy, issuing currency, managing inflation, and ensuring stability of the financial system. It also supervises and regulates banks and other financial institutions in the country.

SEBI – The Securities and Exchange Board of India (SEBI) is the regulatory authority for the securities market in India, responsible for protecting investor interests and ensuring fair practices by regulating stock exchanges, brokers, mutual funds, and other market participants.

NABARD – NABARD (National Bank for Agriculture and Rural Development) is a development bank in India that provides financial support and policy guidance for agriculture, rural development, and allied sectors. It plays a key role in refinancing and funding rural infrastructure and credit institutions.

SIDBI – SIDBI (Small Industries Development Bank of India) is a financial institution that promotes, finances, and develops micro, small, and medium enterprises (MSMEs) in India. It supports entrepreneurship through credit, funding schemes, and capacity-building initiatives.

IRDAI – IRDAI (Insurance Regulatory and Development Authority of India) is the regulatory body overseeing the insurance sector in India, ensuring the protection of policyholders’ interests and promoting fair practices among insurers. It regulates, licenses, and monitors insurance companies and intermediaries.

Banking Acts and Reforms

Banking Acts and Reforms in India include topics like Banking Regulation Act, 1949, RBI Act, 1934, SARFAESI Act, and Basel Norms. A brief introduction to these topics is provided below.

Banking Regulation Act, 1949 – The Banking Regulation Act, 1949 is the primary law governing banking operations in India, empowering the Reserve Bank of India (RBI) to regulate, control, and supervise all banking institutions. It lays down provisions related to licensing, management, and functioning of banks.

RBI Act, 1934 – The RBI Act, 1934 is the legislation that established the Reserve Bank of India and provides the legal framework for its operations, including currency issuance, monetary policy formulation, and regulation of the banking system in India.

SARFAESI Act – The SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act), 2002 empowers banks and financial institutions to recover non-performing assets (NPAs) without court intervention by auctioning secured assets of defaulting borrowers.

Basel Norms – Basel Norms are international banking regulations issued by the Basel Committee on Banking Supervision that set standards for capital adequacy, risk management, and financial stability. They aim to strengthen the resilience of banks against financial and operational risks.

Digital Banking

Digital Banking includes topics like UPI, NEFT, RTGS, IMPS, AEPS, BBPS, and NPCI products. A brief introduction to these topics is provided below.

UPI – UPI (Unified Payments Interface) is a real-time payment system developed by NPCI that enables instant money transfers between bank accounts via mobile devices, using a simple UPI ID or QR code. It allows seamless 24×7 transactions and is widely used for digital payments in India.

NEFT – NEFT (National Electronic Funds Transfer) is an electronic payment system operated by RBI that enables individuals and businesses to transfer funds from one bank account to another across India in a batch-wise and near real-time manner. It is available 24×7, including holidays.

RTGS – RTGS (Real-Time Gross Settlement) is a payment system operated by the RBI that allows high-value fund transfers (₹2 lakh and above) to be settled individually and instantly in real-time between banks, ensuring immediate and final settlement.

IMPS – IMPS (Immediate Payment Service) is an instant, real-time interbank electronic fund transfer system in India, available 24×7, including weekends and holidays. It allows secure transfers through mobile number, account number, or UPI ID.

AEPS – AEPS (Aadhaar Enabled Payment System) is a digital payment system that allows bank customers to perform basic banking transactions like cash withdrawal, balance inquiry, and fund transfer using their Aadhaar number and biometric authentication through micro-ATMs.

NPCI – NPCI (National Payments Corporation of India) is an umbrella organization set up by the RBI and IBA to develop and manage digital payment systems in India, including UPI, IMPS, AEPS, RuPay, and BHIM. It aims to promote a cashless and inclusive economy.

Government Schemes

Important government schemes include schemes like PMJDY, PMSBY, PMJJBY, APY, Mudra Yojana, and Stand Up India. A brief intro to these schemes is provided below.

PMJDY – PMJDY (Pradhan Mantri Jan Dhan Yojana) is a financial inclusion scheme launched by the Government of India to provide universal access to banking services by opening zero-balance bank accounts with benefits like RuPay cards, insurance, and direct benefit transfers.

PMSBY – PMSBY (Pradhan Mantri Suraksha Bima Yojana) is a government-backed accidental insurance scheme that provides coverage of ₹2 lakh for accidental death or full disability at a nominal annual premium of ₹20 for individuals aged 18 to 70 years.

PMJJBY – PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana) is a government-backed life insurance scheme that offers a life cover of ₹2 lakh at an annual premium of ₹436 for individuals aged 18 to 50 years, renewable every year.

APY – APY (Atal Pension Yojana) is a government-backed pension scheme aimed at unorganized sector workers, providing a fixed monthly pension (₹1,000 to ₹5,000) after the age of 60, based on the subscriber’s contribution and age at entry.

Mudra Yojana – MUDRA Yojana (Pradhan Mantri MUDRA Yojana – PMMY) is a government scheme that provides collateral-free loans up to ₹10 lakh to non-corporate, non-farm small and micro enterprises through banks and NBFCs, supporting entrepreneurship and self-employment.

Stand Up India – Stand Up India is a government scheme that provides bank loans ranging from ₹10 lakh to ₹1 crore to SC/ST and women entrepreneurs for setting up greenfield enterprises in manufacturing, services, or trading sectors, promoting inclusive entrepreneurship.

Banking Abbreviations

Some of the Banking Abbreviations include Priority Sector Lending (PSL), IFSC, SWIFT, etc. These terms are introduced in short below.

PSL – PSL (Priority Sector Lending) is a mandate by the RBI requiring banks to allocate a specific portion of their lending to sectors vital for economic development, such as agriculture, MSMEs, education, housing, and weaker sections, to ensure inclusive growth.

IFSC – IFSC (Indian Financial System Code) is a unique 11-character alphanumeric code used to identify a specific bank branch in India for electronic payment systems like NEFT, RTGS, and IMPS. It ensures accurate routing of funds during transactions.

SWIFT – SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a global messaging network used by banks and financial institutions to securely exchange information and instructions for international money transfers. It ensures fast, standardized, and secure cross-border transactions.

Recent Banking Updates

Also read about recent Mergers, Monetary Policy Changes, RBI Circulars, and Financial Inclusion Updates. These are important, and most probably, they will be asked in the SBI CBO exam. For this, you can refer to the RBI official website and learn about current monetary policy updates.

Lending and Advances

Learn about the Types of Loans, Fund-Based/Non-Fund-Based Lending, KYC Norms, and Credit Appraisal.

Above mentioned banking knowledge topics are important and will most likely be asked in the exams. Therefore, the candidates must prepare for these topics well and revise them.

Conclusion

In this blog, we have provided a list of important Banking Knowledge topics that will be asked in the upcoming SBI CBO exam. This will help candidates in the last-minute revision, too. Candidates should memorise these topics and should have basic knowledge about them, which will also be helpful for other banking exams. For the SBI CBO exam, prepare by focusing on important topics in the remaining months and attempting a mock test every week. Also, analyse each mock test and know the solution to each question and how you can solve it effectively.

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