The economy section is mostly facts about institutions and terms: when the RBI was set up and what it does, how banks were nationalised, the full forms of payment systems (NEFT, RTGS, IMPS, IFSC), the difference between direct and indirect taxes and what GST is, and a few budget words. These are fixed facts — learn the dates and the full forms and the section becomes easy marks.
1935
RBI established
Nationalised in 1949
2017
GST rolled out
'One Nation, One Tax' (1 July)
15
Languages on a currency note
On the note's language panel
The RBI and the banking system
India's central bank, and how banks are organised.
| Fact | Detail |
|---|---|
| RBI established | 1935 (on the Hilton Young Commission); HQ Mumbai |
| RBI nationalised | 1949 |
| Bank nationalisation | 14 banks in 1969, 6 more in 1980 |
| First Regional Rural Bank | 1975 |
| NABARD established | 1982 (for rural/agri credit) |
| SEBI (markets regulator) | 1988; statutory in 1992 |
QUICK CHECK
PYQ · SSC — In which year was the Reserve Bank of India established?
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Answer: B — 1935
The RBI was established in 1935 and nationalised in 1949.
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PYQ · SSC — In which year was the RBI nationalised?
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Answer: B — 1949
The RBI was nationalised in 1949, coming fully under government ownership.
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PYQ · SSC — The first Regional Rural Bank in India was established in which year?
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Answer: D — 1975
The first Regional Rural Bank (Prathama Bank) was set up in 1975.
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PYQ · SSC — In which year was NABARD established?
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Answer: D — 1982
NABARD, the apex body for rural and agricultural credit, was set up in 1982.
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PYQ · SSC — What is 'collateral' in the banking system?
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Answer: A — An asset a borrower pledges as a guarantee until the loan is repaid
Collateral is an asset a borrower pledges to the lender as security until the loan is repaid.
Money, currency and payment systems
Who prints what, and the full forms you must know.
Indian currency
Banknotes are issued by the RBI (except the ₹1 note, issued by the Government). The note carries a 15-language panel.
Reserve Bank of India · GODL-India
Coins and the ₹1 note are issued by the Government of India; all other notes by the RBI.
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| Abbreviation | Full form |
|---|---|
| NEFT | National Electronic Funds Transfer |
| RTGS | Real-Time Gross Settlement (large amounts) |
| IMPS | Immediate Payment Service (instant, 24x7) |
| IFSC | Indian Financial System Code (identifies a bank branch) |
| GSTIN | Goods and Services Tax Identification Number |
QUICK CHECK
PYQ · SSC — In banking, what is the full form of IMPS?
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Answer: D — Immediate Payment Service
IMPS stands for Immediate Payment Service — instant, round-the-clock fund transfer.
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PYQ · SSC — Which alphanumeric code uniquely identifies a bank branch in the NEFT system?
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Answer: C — IFSC
The IFSC (Indian Financial System Code) uniquely identifies each bank branch.
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PYQ · SSC — How many languages are there on the language panel of an Indian currency note?
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Answer: C — 15
A note shows the amount in 15 languages on its language panel (plus Hindi and English on the face).
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PYQ · SSC — The place where bankers meet and settle their mutual claims is known as the:
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Answer: A — Clearing House
A Clearing House is where banks settle their mutual claims and cheques.
Inflation, taxes and the Budget
Price rise, how taxes work, and GST.
| Term | Meaning |
|---|---|
| Inflation | A general rise in prices; money buys less |
| Direct tax | Paid directly to govt (income tax, corporate tax) |
| Indirect tax | Paid on goods/services (GST, customs) |
| Progressive tax | Higher income → higher tax rate |
| GST (2017) | 'One Nation, One Tax'; GST Council has 33 members |
| Fiscal deficit | When govt spending exceeds its income |
QUICK CHECK
PYQ · SSC — If money-supply growth is faster than real GDP growth, it results in:
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Answer: A — Inflation
Too much money chasing the same goods pushes prices up — that is inflation.
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PYQ · SSC — A tax that collects a greater share of income from high earners than low earners is a:
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Answer: D — Progressive tax
A progressive tax takes a higher rate as income rises (e.g. income tax slabs).
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PYQ · SSC — What is the full form of GSTIN?
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Answer: B — Goods and Services Tax Identification Number
GSTIN = Goods and Services Tax Identification Number — a unique number for each registered business.
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PYQ · SSC — How many members are there in the GST Council?
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Answer: A — 33
The GST Council has 33 members (the Union Finance Minister, a Union MoS, and one minister from each state/UT with a legislature).
Stock market and national income
Where shares trade, and a national-income identity.
QUICK CHECK
PYQ · SSC — Personal Income − Personal tax payments − Non-tax payments equals:
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Answer: C — Personal Disposable Income
Personal Disposable Income is what remains for a household to spend or save after taxes.
COMMON TRAPS
- RBI: established 1935, nationalised 1949 — don't mix the two dates.
- Bank nationalisation: 14 banks in 1969, 6 in 1980; RRBs from 1975; NABARD 1982.
- IMPS = Immediate Payment Service (not 'Instant'); IFSC identifies a branch.
- GST & customs = indirect tax; income tax = direct tax. GST Council = 33 members.
- A currency note's language panel has 15 languages (plus Hindi & English).
FLASHCARDS
Quick revision
- RBI established / nationalised
- 1935 / 1949
- First bank nationalisation
- 1969 (14 banks)
- NABARD established
- 1982
- IMPS
- Immediate Payment Service
- GST rollout
- 1 July 2017
- Markets regulator
- SEBI
CHECK YOURSELF
Income tax is an example of which kind of tax? (a) Indirect tax (b) Direct tax (c) Value-added tax (d) Customs duty
Show answer
(b) Direct tax. Income tax is paid directly by a person to the government; GST and customs are indirect taxes on goods and services.