Budget & Banking – Study Notes
(For Nagaland Patwari / Lekhpal – General Awareness & Current Affairs)
1. Simple Explanation
| Term | What it Means |
|---|---|
| Budget | The government’s yearly plan that lists all expected income (taxes, grants, etc.) and all planned expenditure (defence, health, education, etc.). |
| Banking | The business of accepting deposits, giving loans, facilitating payments, and providing financial services to individuals, businesses and the government. |
| Public Sector Banks (PSBs) | Banks owned by the government (e.g., State Bank of India, Punjab National Bank). |
| Private Sector Banks | Banks owned by private entities (e.g., HDFC Bank, ICICI Bank). |
| Co‑operative Banks | Banks that are owned and managed by their members (e.g., State Co‑operative Bank). |
| Digital Banking | Banking services accessed through the internet or mobile apps (e.g., UPI, NEFT, IMPS). |
| Financial Inclusion | Making banking services available and affordable to all sections of society, especially the poor and rural areas. |
2. Key Points to Remember
| Category | Important Facts |
|---|---|
| Budget (2025‑26) | • Total outlay: ₹ 18.48 trn (≈ ₹ 2.7 trn higher than 2024‑25). • Major allocations: Defence ₹ 3.77 trn, Health ₹ 2.02 trn, Education ₹ 1.41 trn, Agriculture ₹ 0.68 trn. • Focus on “Green & Digital India” initiatives. |
| Banking Reforms | • SBPS (SBI Private Sector): SBI now a public‑private partnership, 12% equity held by government. • Banking Ombudsman: New digital portal launched for faster redressal. |
| Digital Banking | • UPI (Unified Payments Interface): Usage growth > 90 % YoY; 1.2 billion transactions in FY 2024‑25. • NFC & QR Payments: RBI encourages contactless payments to reduce cash usage. |
| Financial Inclusion | • Pradhan Mantri Jan Dhan Yojana (PMJDY): 1.6 billion accounts opened (Jan‑2024). • Rural Banking: 1.5 % increase in rural deposits FY 2024‑25. |
| Interest & Rates | • RBI’s repo rate (as of Nov‑2026): 6.75 %. • Marginal Standing Facility (MSF) rate: 7.45 %. |
| Credit & Loans | • Credit‑to‑GDP ratio: 15.5 % (FY 2024‑25). • Home‑Loan Interest: Avg. 8.25 % (fixed 5‑yr). |
| Banking‑Sector Regulations | • RBI Act 1934 – Governing authority. • Banking Regulation Act 1949 – Licensing & supervision. • PRSA (Payment and Settlement Systems Act) 2017 – Governs UPI & other NEFT/IMPS. |
| Emerging Trends | • Open Banking – APIs for third‑party services. • Green Bonds – RBI’s “Green Bond Programme” launched 2025. • Digital KYC – Aadhaar‑based e‑KYC for faster account opening. |
3. Worked Example
Problem
A resident of Nagaland opens a savings account at a private bank with an annual interest rate of 4.5 % (simple interest). He deposits ₹ 1,20,000 on 1st April 2026.
Q: What will be the interest earned by 31st March 2027?
Solution
- Principal (P) = ₹ 1,20,000
- Rate (R) = 4.5 % per annum
- Time (T) = 1 year (from 01‑Apr‑26 to 31‑Mar‑27)
- Simple Interest (SI) = ( P \times R \times T / 100 )
[ SI = 1,20,000 \times 4.5 \times 1 / 100 = 5,400 ]
Answer: The account will earn ₹ 5,400 in interest for the year 2026‑27.
Tip: For compound interest or monthly compounding, use (A = P(1 + r/n)^{nt}).
4. Quick Revision Summary
| Item | What to Memorise |
|---|---|
| Budget FY 2025‑26 | Total outlay ₹ 18.48 trn; major sectors: Defence, Health, Education, Agriculture. |
| Banking Types | PSBs, Private Sector Banks, Co‑operative Banks. |
| Digital Payments | UPI > 90 % growth; NEFT/IMPS continues to expand. |
| Financial Inclusion | PMJDY accounts 1.6 billion; rural deposits up 1.5 %. |
| RBI Rates (Nov‑2026) | Repo 6.75 %; MSF 7.45 %. |
| Key Acts | RBI Act 1934, Banking Regulation Act 1949, PRSA 2017. |
| Emerging Concepts | Open Banking, Green Bonds, Digital KYC. |
| Sample Calculation | Simple interest on ₹ 1,20,000 at 4.5 % = ₹ 5,400. |