RBI Grade B DEPR Interview

RBI Grade B selection has three stages: Phase I (qualifying), Phase II of 300 marks, and an interview of 75 marks, so final merit is out of 375 and the interview is 20 per cent of it, as per the latest advertisement. A psychometric test is held before the interview and is not counted in the score. The board typically has four to five members: a retired or serving RBI Executive Director or Chief General Manager in the chair, two or three senior RBI officers, and an external expert, often an economist or academic. Interviews run 20 to 40 minutes and may be taken in Hindi or English. The board starts from your biodata and your graduation or post-graduation subject, moves to RBI's functions, the latest monetary policy and inflation data, banking regulation and financial stability, and then to current economic developments; DEPR and DSIM candidates are pushed much deeper into economics and statistics respectively, including their dissertation or research work. The ExamPilot mock compresses this to fifteen minutes with the same arc: biodata and motivation, a demanding economics and regulation round with an RBI-level member, two regulatory or departmental situations, and a short close on posting and career.

1. 1

   Monetary economics

   What is the neutral rate of interest, why can it not be observed directly, and how would you estimate it for India?

   What a strong answer covers

   Defines the neutral rate as the real interest rate consistent with output at potential and stable inflation, explains it is unobservable and model-dependent, and mentions estimation through semi-structural filters of the Laubach-Williams kind, DSGE models or term-structure methods, with wide uncertainty bands. Avoid treating it as a precise, known number.

2. 2

   Inflation dynamics

   Is the Phillips curve flat in India? What evidence would you look at, and what does it imply for monetary policy?

   What a strong answer covers

   Discusses the weak relationship between output gap and inflation, the role of supply shocks and food prices, expectations anchoring, and the policy implication that inflation control may require larger output costs or relies on expectations. Avoid one-sided answers or ignoring measurement issues.

3. 3

   Fiscal-monetary interaction

   How does a large fiscal deficit affect monetary policy and the yield curve?

   What a strong answer covers

   Higher government borrowing raises long-term yields, may crowd out private investment, complicates liquidity management and can raise inflation expectations, with debt sustainability concerns. Mentions how the RBI manages the borrowing programme. Avoid ignoring the interaction or assuming automatic monetisation.

4. 4

   Open economy

   Explain exchange rate pass-through to inflation in India and why it may have changed over time.

   What a strong answer covers

   Pass-through depends on import intensity, the invoicing currency, firms' pricing power, the size and persistence of the move, and the inflation regime. It may have declined as inflation targeting anchored expectations, though fuel and edible oils still transmit quickly. Avoid claiming pass-through is complete or constant over time.

5. 5

   Research defence

   Defend the main result of your dissertation against the criticism that your identification strategy is weak.

   What a strong answer covers

   Explains the identification approach plainly, concedes the most credible threat such as omitted variables or reverse causality, presents robustness checks, alternative instruments or placebo tests already done, and states what the result can and cannot claim. Avoid becoming defensive or dismissing the criticism as irrelevant.

6. 6

   Climate and central banking

   Should central banks factor climate change into monetary policy and supervision? Give a balanced view.

   What a strong answer covers

   Climate shocks hit food and energy prices and can affect the transmission of policy, while physical and transition risks affect banks' asset quality. Supervision can require disclosures, stress tests and governance, whereas monetary policy has a narrower mandate. A balanced answer weighs mandate limits against real risks. Avoid extreme positions on either side.

7. 7

   Expectations

   What role do inflation expectations play in monetary policy, and how does the RBI measure them?

   What a strong answer covers

   Expectations shape wage bargaining and price setting, so anchored expectations make disinflation cheaper. The RBI tracks household surveys, the survey of professional forecasters, and market-based signals from bond yields. A strong answer notes that households' expectations are high and noisy. Avoid ignoring measurement problems or treating any one gauge as definitive.

8. 8

   Global economy

   How do tariffs imposed by major economies affect India's growth, inflation and exchange rate?

   What a strong answer covers

   Works through channels: lower export demand in affected sectors, possible trade diversion and supply-chain relocation opportunities, effects on the rupee and capital flows, and limited direct inflation impact. Balances risks and openings for India. Avoid assuming effects are only negative or only positive, or quoting tariff rates you are unsure of.

9. 9

   Debt sustainability

   Is India's public debt sustainable? What conditions would make it so?

   What a strong answer covers

   Uses the interest rate-growth differential, the primary deficit, the maturity and currency composition of debt mostly held domestically in rupees, and the credibility of the consolidation path, including state government debt. Reaches a balanced judgement on what must hold for sustainability. Avoid alarmist or complacent claims without analysis.

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