RBI Grade B Finance & Management: 10 High-Yield Topics With Short Notes

The Finance & Management (FM) paper in RBI Grade B Phase 2 has a big syllabus, but marks come mostly from about ten topics. If you master these, you can write good answers and also handle the MCQs. Here are my ten, with short notes you can revise in an hour.

How the FM paper works

Point	Detail (approx, as per recent cycles)
Marks	100
Time	120 minutes (approx)
Format	Objective + descriptive (online)
Split	Finance about 60%, Management about 40% (approx)

Finance: 6 high-yield topics

1. Financial system and markets

• Money market (up to 1 year): T-bills, CP, CD, call money, TREPS. Capital market (more than 1 year): shares, bonds.
• Regulators: RBI (banks, money market, G-secs), SEBI (securities), IRDAI (insurance), PFRDA (pensions).
• Read: Money market instruments, Capital market basics.

2. Banking regulation and Basel III

• India: CRAR 9%, CET1 5.5%, CCB 2.5%, leverage ratio 4% for D-SIBs, 3.5% for others.
• LCR 100%; NSFR 100%.
• Read: Basel III norms explained.

3. NPA, IBC and recovery

• NPA after 90 days overdue; substandard → doubtful → loss.
• Recovery tools: SARFAESI (2002), IBC (2016), DRTs, Lok Adalats.
• Read: NPA classification, SARFAESI, IBC and DRT.

4. Monetary policy and transmission

• MPC: 6 members, 4% ± 2% CPI target.
• Lending benchmarks: Base Rate (2010) → MCLR (2016) → EBLR (2019).
• Read: Monetary policy transmission, Inflation targeting.

5. Derivatives and risk management

• Forwards, futures, options, swaps. Risks: credit, market, operational, liquidity.
• Measures: VaR, duration, stress testing.
• Key idea: derivatives transfer risk; they do not remove it.

6. FinTech, payments and inclusion

• UPI, CBDC (e₹), account aggregators, digital lending rules.
• Read: Digital Rupee explained, UPI vs NEFT vs RTGS vs IMPS.

Management: 4 high-yield topics

7. Motivation theories

Theory	Thinker	One-line idea
Hierarchy of needs	Maslow	Physiological → safety → social → esteem → self-actualisation
Two-factor	Herzberg	Hygiene factors prevent dissatisfaction; motivators create satisfaction
Theory X and Y	McGregor	X: people avoid work; Y: people seek responsibility
Expectancy	Vroom	Motivation = Expectancy × Instrumentality × Valence
ERG	Alderfer	Existence, Relatedness, Growth
Achievement needs	McClelland	Need for achievement, affiliation, power

8. Leadership

• Trait, behavioural, contingency (Fiedler), situational (Hersey–Blanchard), transformational vs transactional.
• Managerial Grid: Blake and Mouton (9,9 = team management).

9. Communication and organisational behaviour

• Barriers: semantic, psychological, organisational, physical.
• Johari Window (Luft and Ingham): open, blind, hidden, unknown.
• Change management: Kurt Lewin (unfreeze → change → refreeze).

10. HRM and ethics

• Recruitment vs selection; performance appraisal (360-degree, MBO by Peter Drucker).
• Corporate governance, whistle-blower policy, CSR (Section 135).
• Read: Management theories.

How to write an FM descriptive answer

1. Define the term in one line.
2. Explain with 3–4 points (sub-heads help).
3. Give an Indian example (RBI rule, bank, scheme).
4. Conclude with significance or way forward.

Quiz: test yourself

FM paper format as per recent cycles (approx). Check the latest notification.