IBPS Exam Preparation – Know About Banks

IBPS Exam for Bank PO and Bank Clerical have become the most important exam for aspirants of bank jobs. Applicants for IBPS Exam should know some of the basic facts about banks which can be useful during common written examination as well as during ibps bank interviews.
Definition of Banks
In India, the definition of the business of banking has been given in the Banking Regulation Act, (BR Act), 1949. According to Section 5(c) of the BR Act,
 ”A banking company is a company which transacts the business of banking in India.”
Further, Section 5(b) of the BR Act defines banking as,
“accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable, by cheque, draft, order or otherwise.”
This definition points to the primary activities of a commercial bank which distinguish it from the other financial institutions. These are:

• Maintaining deposit accounts including current accounts
• Issuing and paying cheques

Importance of Banks
Banks are special for three important reasons.

1. Banks take a primary role in developing other financial intermediaries and markets.
2. Due to the absence of well-developed equity and bond markets, the corporate sector depends heavily on banks to meet its financing needs.
3.  Banks helps vast number of savers from the household sector, who prefer assured income and liquidity and safety of funds, because of their inadequate capacity to manage financial risks.

Commercial banks in India have traditionally focused on meeting the short-term financial needs of industry, trade and agriculture. However, given the increasing sophistication and diversification of the Indian economy, the range of services extended by commercial banks has increased significantly, leading to an overlap with the functions performed by other financial institutions. Further, the share of long-term financing (in total bank financing) to meet capital goods and project-financing needs of industry has also increased over the years. The main functions of a commercial bank can be segregated into three main areas:

• Payment System
• Financial Intermediation
• Financial Services.

 (i) Payment System
A payment refers to the means by which financial transactions are settled. A basic method by which banks help in settling the financial transaction process is by way of issuing and paying cheques issued on behalf of customers. The payments system also includes electronic banking, wire transfers, settlement of credit card transactions, etc. In all such transactions, banks play a critical role.
(ii) Financial Intermediation

• The second main function of a bank is to take different types of deposits from customers and then lend these funds to borrowers, in other words, financial intermediation.
• In financial terms, bank deposits represent the banks’ liabilities, while loans disbursed, and investments made by banks are their assets.
• Bank deposits serve the useful purpose of addressing the needs of depositors, who want to ensure liquidity, safety as well as returns in the form of interest.
• Bank loans and investments made by banks play an important function in channeling funds into profitable as well as socially productive uses.

(iii) Financial Services
Banks also provide financial services such as investment banking, insurance-related services, government-related business, foreign exchange businesses, wealth management services, etc. Income from providing such services improves a bank’s profitability.

Banking Structure in India

Banking Regulator
The Reserve Bank of India is

• The central banking and monetary authority of India
• The regulator and supervisor of commercial banks

Scheduled Banks in India
Scheduled banks comprise scheduled commercial banks and scheduled co-operative banks.

• Scheduled commercial banks form the bedrock of the Indian financial system, currently accounting for more than three-fourths of all financial institutions’ assets.
• SCBs are present throughout India, and their branches, having grown more than four-fold in the last 40 years now number more than 80,500 across the country.

Public Sector Banks

• Public sector banks are those in which the majority stake is held by the Government of India.
• Public sector banks together make up the largest category in the Indian banking system.
• There are currently 27 public sector banks in India.
• They include the SBI and its 6 associate banks, 19 nationalized banks and IDBI Bank Ltd.
• Public sector banks have taken the lead role in branch expansion, particularly in the rural areas.
• Public sector banks account for bulk of the branches in India (88 percent in 2009).
• In the rural areas, the presence of the public sector banks is overwhelming; in 2009,
• 96 percent of the rural bank branches belonged to the public sector.

Regional Rural Banks

• Regional Rural Banks (RRBs) were established during 1976-1987 with a view to develop the rural economy.
• Each RRB is owned jointly by the Central Government, concerned State13 Government and a sponsoring public sector commercial bank.
• RRBs provide credit to small farmers, artisans, small entrepreneurs and agricultural laborers.
• Over the years, the Government has introduced a number of measures of improve viability and profitability of RRBs, one of them being the amalgamation of the RRBs of the same sponsored bank within a State. This process of consolidation has resulted in a steep decline in the total number of RRBs to 86 as on March 31, 2009, as compared to 196 at the end of March 2005.

 Private Sector Banks

• In this type of banks, the majority of share capital is held by private individuals and corporate.
• Not all private sector banks were nationalized in 1969, and 1980.
• The private banks which were not nationalized are collectively known as the old private sector banks and include banks such as The Jammu and Kashmir Bank Ltd., Lord Krishna Bank Ltd etc.
• As at end March, 2009 there were 7 new private sector banks and 15 old private sector

Foreign Banks

• Foreign banks have their registered and head offices in a foreign country but operate their branches in India.
• The RBI permits these banks to operate either through branches; or through wholly-owned subsidiaries.
• The primary activity of most foreign banks in India has been in the corporate segment.
• However, some of the larger foreign banks have also made consumer financing a significant part of their portfolios.
• These banks offer products such as automobile finance, home loans, credit cards, household consumer finance etc.
• Foreign banks in India are required to adhere to all banking regulations, including priority-sector lending norms as applicable to domestic banks.
• Some of the existing private sector banks, which showed signs of an eventual default, were merged with state owned banks.
• It may be noted that two important erstwhile developmental financial institutions, viz. Industrial Development Bank of India (IDBI) and Industrial Credit and Investment Corporation of India (ICICI) converted themselves into commercial banks after the new bank licensing policy was announced in July 1993.
• In addition, a foreign institution could also invest up to 74% in domestic private bank, in which up to 49% can be via portfolio investment.
• At the end of June 2009, there were 32 foreign banks with 293 branches operating in India.
• Besides, 43 foreign banks were operating in India through representative offices.
• Under the World Trade Organization (WTO) Agreement, RBI allows a minimum 12 branches of all foreign banks to be opened in a year.

Co-operative Banks

• Co-operative banks cater to the financing needs of agriculture, retail trade, small industry and self-employed businessmen in urban, semi-urban and rural areas of India.
• A distinctive feature of the co-operative credit structure in India is its heterogeneity.
• The structure differs across urban and rural areas, across states and loan maturities.
• Urban areas are served by urban cooperative banks (UCBs), whose operations are either limited to one state or stretch across states.
• The rural co-operative banks comprise State co-operative banks, district central cooperative banks, SCARDBs and PCARDBs.
• The co-operative banking sector is the oldest segment of the Indian banking system. The network of UCBs in India consisted of 1721 banks as at end-March 2009, while the number of rural co-operative banks was 1119 as at end-March 2008.
• Owing to their widespread geographical penetration, cooperative banks have the potential to become an important instrument for large-scale financial inclusion, provided they are financially strengthened.
• The RBI and the National Agriculture and Rural Development Bank (NABARD) have taken a number of measures in recent years to improve financial soundness of co-operative banks.

IBPS CWE Cut Off Marks 2011 for Probationary Officers (PO)

The IBPS Common Written Exam (CWE) for Probationary Officers(PO) concluded in two sessions on 18th September 2011. Hence we are discussing the cutoff marks in each paper and for overall exam for morning session and evening session. The Cutoff Score generally depends on the following items.


(1) The average marks in each paper at National Level.
(2) The total number of candidates appeared to the examination.
(3) The relative difficulty/easiness of each paper.


The experts (Various Institute Directors and Senior faculty) expressed their opinion on CUT OFF MARKS as follows. Cutoff Marks are very important as IBPS issue score cards only to those candidates who qualify in each paper.


(1) Reasoning  22-27 marks
(2) English Language 12-18 marks
(3) Quantitative Aptitude 21-26 marks
(4) General Awareness  25-30 marks
(5) Computer Knowledge 25-30 marks
(6) Descriptive Paper 10-15 marks


The Viewers are invited to express paper wise their expected marks, cut off marks, their doubts & questions on answers & solutions of IBPS Common Written Exam for PO in each paper.

IBPS Clerks Exam Pattern Details

IBPS Clerical Cadre Exam Pattern Details: Institute of Banking Personnel Selection – IBPS conducting Common Written Examination (CWE) for Clerical Cadre vacancies in 19 National Banks twice in a year. IBPS Common written examination, exam pattern details given below…

Institute of Banking Personnel Selection (IBPS) will be conducts Common Written Examination (CWE) 2 times in a year for Clerical Cadre posts. The Common Written Examination consists of objective types questions, total no. of questions is 250, total marks 250 and total time duration of 150 minutes. There will be Negative Marking of 0.25 marks for each wrong answer in the objective type exam. IBPS CWE Scorecards will be sent to the qualified candidates by Speed Post/Register Post. IBPS CWE Scorecard has validity of 1 year from the date of issue of the scorecard.

Written Examination Structure:-

Sr. No.	Name of Tests (Objective)	No. of Questions	Maximum Marks	Total Time
1	Test of Reasoning	50	50	150 Minutes
2	Test of English Language	50	50
3	Test of Numerical Ability	50	50
4	Test of General Awareness with special reference to Banking Industry	50	50
5	Test of Computer Knowledge	50	50
	Total	250	250