RBI GRADE B DEPR-

A Playbook1

1
I would like to thank the batch of DEPR 2021 and Saiganesh R. for the valuable inputs
Ideally you should have read the official notification “Direct Recruitment for the post of
Officers in Grade ‘B’ (Direct Recruit-DR) (On Probation-OP) (General/DEPR/DSIM)
Streams- Panel Year 2022”. I know it is a long document but skip to the part that talks
about DEPR, get acquainted with the eligibility, the pattern and so on. This is very
important since it will help you in a long way during the final selection.

Jumping straight to the meat of the matter you have three giants standing in front of
you. Like any other game you need to pass through them to emerge victorious. Let’s
break down each of them.

Phase 1
Phase I consists of one objective type paper on economics. The time duration for Paper
I is 120 minutes.Marking scheme is quite tricky, kindly go through it thoroughly
through the documents. Since we don't have any past year question papers available
online most of the questions are written by folks who gave it. So take it with all the
caveats. Let me give you a flavor of questions that you could expect:-

Memory Based Questions -2021

1 markers
General equilibrium, tariff large country
Effect of Import Tariff on Terms of Trade and Welfare
Bhagawati absorption approach
Elasticity numerical
Confidence interval numerical
Equating P = MC numerical
Finding TR, MR, MC, TC from production function and cost function
Calculation of Consumer Surplus
Probability of normal distribution numerical
Infant industry policy question
DW statistic limits
Competitive equilibrium numerical ( perfect substitute and Cobb Douglas utility) with
 endowments
Allocation of public good street light numerical
Binomial distribution mean variance numerical
Cournot Model and Kinked Demand Curve Model
Features of a Public Good
Kravis Theory of Information (Trade)
Calculation of Primary Deficit
Substitution effect income effect conceptual question
Infant industry policy and it's impact
Applied public economics - numerical (Bridge and the cost of operating it)
Occurrence of autocorrelation and heteroscedasticity in which data types (time
series/panel/cross section)

2 markers
ISLM numericals basic ones (equilibrium income and rate of interest)
Unintended investment numerical
Finding Multiplier and Comparative dynamics numericals( increase in Investment and impact
on growth )
Numerical on Increase in G and T - Effect on Y
Numerical on growth rate , icor and investment rate
Expected return on portfolio numerical
Risk numerical with beta, CAPM
Expected Return with Utility ( Summation Ui * Pi)
Agg GDP, Contribution of Agriculture, Growth rate of economy numerical
Constrained optimization Quantity Maximization
Constrained Optimization Minimize cost
Kinked demand numerical
Confidence interval numerical using t test
Cournot numericals
Long run short run Philips curve and Adaptive Expectations
IS Lm conceptual questions (Slopes of IS and LM)
Effective revenue deficit numerical
Perfect competition numerical
National Income Accounting - GVA from GDP numerical
Using Pareto Conditions for calculating welfare (MRS)
 Public economics non rivalrous concept question
Leontief input output model 2x2 model ( find labour demand and output)

3 markers
Finding Regression coefficient in two variable models given standard deviation and mean.
Predict the value of one variable given the value of other variable
Numericals on basic probability and conditional probability
Calculation of Covariance of AX + B

4 markers
Correlation coefficient when two numbers got misplaced numerical
Finding elasticity in a regression model using matrix approach multiple regression

Memory Based Questions - past years

Section 1 - Micro Economics

ICC and Engel curve for Inferior goods

Numericals on cost- calculating- min of AVC (Example - Minimum MC, rising MC, declining
MC, Relationship between AVC , MC, LAC and LMC)
Monopoly question - equilibrium calculation- 3 marks
Calculating elasticity
One numerical on Lerner's Index
Perfect competition equilibrium condition
Conceptual question on AC, AVC and MC diagram
Duopoly question - cournot model
Consumer surplus- 3 marks
Comparative advantage- based numerical- International Trade
Economic and accounting Profit
Substitution and Income effect under Hicks and Slutsky
Numericals on oligopoly - Kinked demand curve
 Numericals public good and externality
Numericals General equilibrium (Calculate equilibrium price and quantity)
Numericals on marginal conditions of pareto efficiency

Section 2- Macro and Indian Economy and Current affairs based questions on Indian
Economy

At what rate India should grow to achieve the $5 trillion target by 2024-25, Growth Targets ,
Fiscal Deficit Targets by WTO,IMF and World Bank
Ranks on important Indexes
Functions of RBI - Monetary Policy Tools (LAF), Balance Sheet of RBI, Radcliffe Report
What bank should keep in mind while investing- (diversification)
IMF projected growth rate in april 2019- Economic Survey
Insolvency resolution claims for 2018-19- 173359 - eco survey
Demographic dividend data based question from eco survey
Sector exempted from GST- electricity, health and education- eco survey
Bank merger based question
GST Council constituted under section 279(1)

Numericals and Conceptual Questions

Higgins model
Match the following - matching the theory with author- like neoclassical associated with
Sargent
One numerical on Money Multiplier and Exchange Rate
One numerical on keynesian model- AD=AS concept- 2 sector, 3 sector or 4 sector
One numerical on keynesian foreign multiplier
Numerical on Golden rule savings rate - Solow model - 3 marks
Two numericals from NI accounting
One conceptual question on Lewis model
One Numerical on IS-LM (solve r,Y)
One Numerical on govt expenditure multiplier under SKM
Mundell Fleming Models
Match the following - for micro- like- quasi rent, time series- AK Sen
Section 3
1,2,4 marks - Econometrics and Stats

Matrix method for regression coefficient(b2)calculation, t value and F value- 4 marks each
Numericals on variance, standard deviation and mean
Numericals on calculation of b1 and b2 using X and Y data points
Calculation of R-sq using X and Y data points
Calculation of R from the regression equations (2 variable)
Basic concepts of assumptions of CLRM Effects of Heteroscedasticity, Autocorrelation
Calculation of t-value
Conceptual questions from Multicollinearity, heteroscedasticity, autocorrelation, time series-
chapter 17, 20, 21- lagged values
Index number- laspeyres index
Relationship between R-sq and Correlation coefficient
Calculating probability, confidence interval, Poisson Distribution

Section 4 - 1,2,4 marks - Miscellaneous

Input - Output Model - whether solution exists or not , Hawkin Simon conditions
Posner trade cycle

Books
★ Basic Econometrics by Gujarati- MCQs at the back of the chapter will be helpful
for matrix questions of 4 marks- refer the appendix of Gujarati to learn how to
solve questions. For some advanced problems you could also look into long
questions in the back of each chapter. For solutions you can check out here.
★ Schaum series worked out examples helps to brush up numericals also for Macro
you can solve some numericals from here
★ For basic statistics and hypothesis testing you can solve the numericals from here
★ Other books like Nicholson , Varian , Hammond could be selectively used for
preparation.
 ★ Stats and Econometric numericals could be solved from youtube searches.
★ For conceptual clarity one could refer to UGC Net Economics PYQs
★ For current affairs pertaining to Indian Economy and Banking one could refer to
sources like PT 365 , Bankers Adda etc.

Strategy
★ You could try Chris Brooks interactive questions (chap 1-4). It gives a good hang
on Stats and Econometrics esp from an application perspective.
★ It’s numerically heavy so one needs to have both speed and accuracy. So always
time yourself while you are practicing. Use shortcut techniques to save up on
derivations. Also note that you don't get a calculator so that means you have to be
really quick.
★ The marking scheme is a bit different. Aim for the high marker questions, don't
invest too much time in it also. It can be a boon and a bane. Attempt accordingly.
★ So folks who find timing your attempt a bit difficult. You could simulate it by
solving some past year MA Entrance papers. For instance, the National Testing
Agency has some mock MA Economics question papers that you can attempt
online , like JNU etc. (Somewhere the numericals asked matches that of the exam)
Note that this is just for simulations and you should not be carried away too much
by this.
 Phase II
Paper II is a descriptive type paper on Economics and Paper III is a descriptive type
paper on English. The time duration for Paper II and Paper III is 180 minutes and 90
minutes respectively. Candidates scoring minimum cut off marks in Paper I will be
shortlisted for Paper II and Paper III. The Paper II and III exams will be conducted in
shifts. The question paper will be set in Hindi and English.

This has a set of past years which are available. But the problem is that it is too much
past and that the type of questions have evolved a lot.

Let me give you a flavor of questions that you could expect:-

Memory Based Questions -2021

PAPER II - ECONOMICS (MORNING) - 100 Marks

QUESTIONS ON SCREEN AND TO BE WRITTEN ON PAPER
ATTEMPT ANY 5/10 WITH MINIMUM 2 AND MAXIMUM 3 FROM EACH SECTION

SECTION I

1. Consumer and Producer equilibrium with PPC and Edgeworth Box Diagram.
Explain Pareto optimality
2. Explain Arrow’s Impossibility Theorem with an example
3. Numerical on Lagrange Multiplier to Minimize Cost given the Production
Function
4. Also find IRS, CRS and IRF, DRF from a table (A table was given with values of
L, K and output)
5. Mundell Fleming Model - Efficiency of Monetary Policy with Partial and Perfect
Capital Mobility under Fixed and Flexible Exchange Rates.
6. Consumer Surplus + Public Good and how is efficient provision of Public Goods
done
Short Notes
i) Vector Auto Regression
ii) Covered and Uncovered Interest Rate Parity
iii) Lag effect of Policies

SECTION II

1. Covid 19 and impact on Indian Economy with measures taken

2. What are horizontal and vertical imbalances? Recommendations of 15th Finance
Commission.(Terms of Reference)
3. Question on inequality and economic growth based on Economic Survey 2021.
4. Problem of Malnutrition in India

Short Notes
i) Niche Banking
ii) PURA Model
iii) One more

PAPER III - ENGLISH (AFTERNOON) - 100 Marks

(TO BE TYPED WITH A KEYBOARD)

Essay Writing - 300 Words

i) Effect of E-learning on young minds
ii) How to reduce investor risk
iii) Ways to improve startup environment

Precis Writing (Summary Writing) - 140 words

Comprehension (Try answering in own words)

Some more memory based Previous year Questions

Section 1

Short term vs Long term Phillips curve - 2017

Non tariff barriers in trade - 2018
Different levels of economic integration - PTA, FTA, CM, EU etc - 2018
Big push, balanced vs unbalanced growth - which is better for India

Section 2
Problems with agricultural sector in India - 2018
Every year 2 questions from economic survey of that or previous year

Books
★ Refer to standard books pertaining to subjects like Macroeconomics, International
Economics, Growth and Development and Indian Economy.
★ For the Indian Economy the thrust would be on contemporary issues like the
Finance Commission and its recommendation, Economic Survey etc.
★ Also the pattern has been changing over the years, so you should also be revising
a bit of Microeconomics as well as Econometrics.
★ You could refer to the books from here

Strategy
★ Keep doing writing practice in a time bound manner especially the past year
questions.
 Phase III
Phase III is an interview round, which is scored out of 75 marks. Candidates overall
personality, communication skills and subject knowledge will be evaluated in this
round. I am attaching a few transcripts of the interviews.

Transcript 1 - Interview duration (10-15 minutes)

Interviewer 1: What is your MPhil thesis about? State it's title?

Answered
Interviewer 1: what methodology did you used ?
Answered.
Interviewer 1: What is principal correspondence analysis? How is it different from
multiple correspondence analysis?
Answered
Interviewer 1: What is unique about the methodology that you have used? What is your
contribution?
Answered
Interviewer 1: What are some other ways to deal with qualitative data in stata?
Answered
Interviewer 1: what is logit model?
Answered
Interviewer 1: Now this is my last question, what are your views about the asset
monetization program ? There is a school of thought which says it should not be done
as it will crowd out private investments and lead to inflation?
Answered ( in this question I was cross questioned for everything I said so after a point
I kept quiet as I couldn't justify myself and then he let go of the question.
Interviewer 2: are you aware about the sexual harassment act? Do you think in a
country like India, we should have this act?
Answered
Interviewer 3: What is KYC? What documents are required to open a bank account?

Note: my interview was mainly based on my dissertation this time. I gave the detailed
questions from my background just to give you an idea about the level of understanding
you should have about your thesis, if you are a PhD or an MPhil.

Transcript 2

Interviewer 1: How can we get data on unemployment (I had prior work experience
with EPFO)
Interviewer 1 then asked couple of counter questions on this...I answered that
Interviewer 2: Say we have 2 policies, either we can cut taxes or we can give direct cash
benefit to people, which one would you choose?
Interviewer 2: If we have to divide expenditure in these two schemes how would you do
it?
Interviewer 2: So, you have studied Quantitative Finance...do you know about
Modgliani-Miller proposition
Interviewer 2: Tell me about the Covariance matrix...how do you do portfolio
optimization
Interviewer 3: Can you tell me something about MSF?
Interviewer 4: How much is India's Forex reserves? Are they enough.

Transcript 3

Interviewer: Should government worry about expenditure on health and education?

should it only focus on capital expenditure?
follow up questions on public debt sustainability, human capital, productivity database
of RBI
Interviewer: How does RBI act as banker to govt
Interviewer: Standard procedure of undertaking a time series analysis
Interviewer: What all econometric softwares have you used
Interviewer: How to measure health of banks
Interviewer: Tell us about your PhD thesis

Transcript 3 - 28th Aug

Int1: You have mentioned Exempt Non Officer as designation in your last work role ,
what does ENO mean?
"Me: Sir, it means that even if you work for more than 40 hrs a week for the company
(which is a general mandate), still you will not be paid overtime . Panel laughed that no
body works overtime in RBI "
Int1: So what you have been doing since you resigned in 2018 ?
Me: Sir, I have been preparing for Civils and RBI
Int 2: Why do we need cooperative banks in India when they are loosing out on
profitability ?
"Me: Madam, recently honourable governor has mentioned that Cooperatives should
function as friends of people because of the reach they have in backward areas. Also not
every cooperative
bank is under losses, also RBI has taken enough steps both in terms of regulation and
supervision to ensure the sick ones are distressed and thus saving money of people"
Int 1: How can we reach a 5 trillion dollar economy ?
Me: I mentioned how the recovery is going on and mentioned few high frequency
indicators
Int 3 : Why do we need foreign banks in India ?
"Me: Sir, they are better placed in businesses like underwriting, raise capital for High
networth individuals, wealth management etc. and also when any domestic institution
raise
capital from foreign banks , it comes with a good reputation , thus helps the
stakeholders in improving trust in the institutions. Also the penetration of debit, credit
cards is a gift of foreign banks "
Int 1: Have you gone through database managed by RBI , name any macro indicators
published by RBI
"Me: I made a blunder here with saying RBI forecast Inflation ( potential red flag hit) ,
Sir mentioned it is done by CSO and then i added like NPA, interest rates etc and
missed out
on main indicators like Money Supply "
Int 4: For the 5 trillion you mentioned that govt has focused on capex, whether it is state
or centre capex which is imp ?
Me: Started through capex and then he again focused on state or centre? I said states
because of the diversity in the states . They nodded and Int 4 came with another ques
Int 4: Have you gone through the RBI report on state budgets? there is a dilemma
between Fiscal deficit and capex cycle , are you aware
Me: Sorry Sir, I am not aware about the report . He said do read that report. Thank you
, you may leave.

2019 Interview

Transcript 1
Interviewer 1: good morning, give us a background about yourself
Interviewer 1: What is your PhD thesis about ?
Interviewer 1: Okay tell me which economist inspired you and name a book by him?
Interviewer 1: What is feminization of poverty?
Interviewer 2: What are your views on reservation for women in parliament?
Interviewer 2: views on Supreme Court judgement on Sabrimala?
Interviewer 3: what do you mean by tax buoyancy and how is it different from tax
elasticity? And what is the Laffer curve?
Interviewer 3: What is twin deficit? Has India faced this before?
Interviewer 3: how can you gauge the government's fiscal position? Name one metric?
Interviewer 3: Are you comfortable with econometrics?
Me: I can try
Interviewer 3: how do you interpret the slope coefficient when you regress y on x and
log (y) on log(x), what is the latter model called?
What is a dummy variable trap?
Interviewer 4: what do you expect from rbi?
Thank you, you can go.
Transcript 2

Interview 1: you have mentioned that you left Job for studying,what are you studying
for?
Me: Sir , For exams and Mphil entrances.
interviewer : What was your job profile?
Me: Sir I worked as a consultant in an analytics firm. My Job profile entailed, Modeling,
statistical analysis, tracking of indicators. I worked for 2 clients, one law firm and one
bank.
Interviewer: Which was the name of the bank?
Me: American Express.
Interviewer: What exactly was the problem you were assigned?
Me: Sir to figure out the prospects for their credit cards. I developed two models:
Revenue Model and Risk Model.
Interviewer: What language did you use?
Me: Python ,R and SAS.
Interviewer: Which algorithms did you use? And did you develop any of the codes
yourself?
Me: Sir i have used multiple algorithms, Support Vector Machines for Classification,
NLP for sentiment classification, Gradient Boosting Machine for revenue amd risk
models.
Interviewer: Can you explain them?
Me: Yes Sir, A bit of explanation for SVM and GBM
Interviewer: How proficient are you in Python?
Me: I am very proficient in Python
Interviewer 2: What does RBI hire as an agency bank?
Me : Agency bank is hired to perform a specific function( i didn't know)
Interviewer 2: It is okay ,you can say you don't know.
Me : Yes sir, i am not aware.

Interviewer 2: We see you have taught in Maitreyi college, DU and you taught
Mathematical Economics and Econometrics.
Me: Yes sir, I have taught 3 subjects, Mathematics economics , Econometrics and
development economics for one semester.
I 2- What is the difference between Mathematical Economics and Econometrics?
Me: Sir Mathematical Economics has concepts which can used across a wide spectrum.
Like Differentiation, Integration, optimisation techniques, Concave and convex
functions and Econometrics teaches how to deal with the data , what are the problems
application, to find a pattern and to make sense out of it.
Interviewer 3- What is deposit insurance?
Me: Sir ,In case of Bank default, depositors will get 5 lakh insurance.
I3- When was it news? What is the date?
Me: 1st week of August
I3- How much was the earlier insurance?
Me: 1 lakh
I3-/What did the Finance Minister say when passing this bill? What was her exact
statement?
Me: Sir, She said ,small banks and depositors will benefit the most and PMC bank
depositors will also benefit. It will allay the fears of depositors when RBI puts sanctions
like it did on PMC.
Interviewer : Thank you.

PRO TIPS
★ Analyze your bio-data that you are going to submit to the panel and make a list of
suggestive questions that could be expected from it
★ Append your current affairs especially with issues pertaining to Indian economy
and the banking sector (specifically with RBI in focus- look into the recent
reports, steps and other things)
 OTHER USEFUL RESOURCES

1. Collaborative initiative by RBI Grade B DEPR 2018 batch

2. Detailed Strategy Post by Vijaya , Shruti , Sapna
3. Also use youtube to check out various strategies by those who have cleared the
examination.