The Central Banking paper of CAIIB helps bankers understand the details of the financial system the role of central banks. This paper explains how central banks have evolved over time, what functions they perform, and why they are important for a country’s growth and stability. It also focuses on the Reserve Bank of India, monetary and credit policies, foreign exchange management, and the regulation of banks and financial institutions.
In this blog, we have provided the detailed exam pattern for CAIIB Elective Paper 5, Central Banking, along with the detailed module wise syllabus.
What is the CAIIB elective paper central banking syllabus?
The CAIIB Paper 5 Elective Paper Central Banking syllabus focuses on helping banking professionals understand the role, functions, and responsibilities of central banks in managing a country’s financial system. As prescribed by the Indian Institute of Banking & Finance, this elective covers six modules and an appendix, including the evolution and functions of central banks, central banking in India, monetary and credit policies, foreign exchange reserve management, regulation and supervision, financial stability, NBFCs, and primary dealers. The syllabus is designed to build a strong conceptual understanding of how central banks maintain economic stability and support financial growth.
What is the exam pattern for CAIIB central banking paper?
The CAIIB elective paper consists of 100 questions, for a total of 100 marks, with no negative marking for incorrect answers, or answers that were not being attempted. The details CAIIB exam pattern are as follows:
| Subject | No. of Questions | Total Marks | Duration |
| Elective Paper 5 Central Banking | 100 | 100 | 2 hours |
Also: Check out the detailed CAIIB Syllabus 2026
What are the modules covered under the central banking paper?
The CAIIB Paper 5 elective paper, Central Banking, consists of 6 modules and one appendix, from which 100 questions are asked. The module-wise details are as follows:
- Module A: Rationale and Functions of Central Bank
- Module B: Central Banking in India
- Module C: Monetary and Credit Policies
- Module D: Management of Foreign Exchange Reserves and Constituents of Indian Financial Market
- Module E: Regulation, Supervision and Financial Stability
- Module F: Non-Banking Financial Companies and Primary Dealers
- Appendix
What are the topics covered in Module A rationale and functions of central banking?
The detailed syllabus for Module A is as follows:
| Topic | Details |
| Theory and Practice of Central Banking: Evolution | – Global evolution of central banks – Reasons for proliferation of central banks – Conflicting roles & responsibilities of central banks – Development of central banks in developed and developing countries |
| Functions of Central Banks | – Banker to Government – Banker to Banks – Lender of Last Resort – Monetary policy functions – Currency issue and management – Payment and settlement systems – Maintaining internal value of money – Maintaining external value of currency – Regulation, facilitation & supervision of financial system – Ensuring financial stability – Promotional functions for growth & national objectives – Development of financial markets & institutions – Central bank communication policies |
| Contemporary Issues in Central Banking | – Autonomy and independence of central bank – Credibility of central bank – Accountability of central bank – Transparency in operations – Conflict with fiscal policies |
Check: CAIIB Exam Date 2026
What does Module B cover about central banking in India?
The detailed syllabus for Module B is as follows:
| Topic | Details |
| Reserve Bank of India | – Organizational evolution – Structure and governance – Major organizational & functional developments over time – RBI Act 1934: salient features & comments |
| Central Banking: Indian Specific Issues | – Banking Regulation Act – FEMA (Foreign Exchange Management Act) – Banking Ombudsman Scheme, 2006 – Financial sector reforms – Other financial regulators & division of functions – Institutions set up by RBI |
| Financial Inclusion and Development | – Impediments to financial inclusion – Role of policy interventions (mandates & subventions) – Building institutional & financial structure using digital technology – Focus on payment & settlement systems vs. extension of credit – Issues & possible resolutions – Financial inclusion & Financial Inclusion Plans |
Check: CAIIB Study Material
What are the key concepts in monetary and credit policies (Module C)?
The detailed syllabus for Module C is as follows:
| Topic | Details |
| Monetary Policy | – Theoretical underpinnings – Objectives of monetary policy – Reconciling dual objectives – Rules vs. discretion – Indicators & instruments of policy – SLR & selective credit controls – Policy transmission mechanisms & channels – Transparency & policy lags – Process of monetary policy formulation in India – Conduct during large capital inflows (2000s) – Recent initiatives for strengthening policy formulation |
| Credit Policy | – Theoretical underpinnings – Nominal vs. real credit – Credit allocation mechanisms – Instruments of credit control – Margin requirements – Credit rationing (credit ceiling) – Credit pricing (setting lending rates) |
| Fiscal-Monetary Relations | – India’s monetary-fiscal relations – Balance between inflation & growth – Trends in central & state government finances (2020–22) – Constitution & recommendations of Fifteenth Finance Commission – Grants-in-aid & fiscal roadmap/rules |
| Liquidity Management in the System | – Theoretical framework of LAF – Genesis & evolution of LAF – Expert Committee recommendations – Revised framework & strategies – Instruments of LAF – Open market operations – Liquidity management during COVID-19 – RBI measures (including April 2022 policy) – Money, G-sec, corporate bond & equity market liquidity conditions |
Also Check: How to Choose the Right Elective Paper
What do you study under foreign exchange reserves and Indian financial markets (Module D)?
The detailed syllabus for Module D is as follows:
| Topic | Details |
| Management of Foreign Exchange Reserves | – Legal framework – Risk management – Operational risk & control system – Transparency & disclosures – Movement & sources of accretion to reserves – Adequacy of reserves – Management of gold reserves – Investment pattern of Foreign Currency Assets (FCA) – Other related aspects |
| Constituents of Indian Financial Market | – Genesis of financial market development – Structure & growth of Indian financial markets – Money market – Government securities market – Foreign exchange market – Reforms: 1990s–2010 – Post-reform foreign exchange market developments – Financial benchmarks – transparency & governance – Roadmap for LIBOR transition |
CAIIB May cycle registration starts from 4th March 2026
What topics are included in Module E of the CAIIB Central Banking paper?
The detailed syllabus for Module E is as follows:
| Topic | Details |
| Evolution of Regulation and Supervision | – Global backdrop & theoretical underpinnings – Interaction between monetary & regulatory policies – Integration vs. separation of functions – Genesis of bank regulation & supervision in India – Compatibility of monetary policy with regulation in India |
| Scheduled Commercial Banks | – Evolution (1950–1969, 1969–1991, post-1991 reforms) – Prudential requirements – Risk management (liquidity, interest rate, currency risk) – Regulatory & supervisory policies – Recent performance & developments (2021) |
| Co-operative Banks | – Growth of cooperative banking system – Dual control framework – Strengthening UCBs’ financial position – Supervisory system strengthening – Implementation status & regulatory improvements – Recent developments |
| Financial Stability | – Global economic crisis implications – Risks & early warning signals – Liquidity management in banks – Basel norms (II & III) implementation progress – RBI’s Basel III perspective – Effect of liberalization & globalization – Consultative & transparent approaches – Linkage with international financial stability – Role of supervisor under Basel II & III |
Also Download :
What are the important topics in NBFC and primary dealers (Module F)?
The detailed syllabus for Module F is as follows:
| Topic | Details |
| NBFCs: Development, Regulation & Supervision | – Registration conditions – NBFCs under RBI & other regulators – Classification categories – Growth & prudence in NBFC sector – RBI’s role in development & regulation – Scale-based regulatory framework – Special Liquidity Scheme (SLS) – Alignment of HFCs with NBFCs – SARFAESI Act: Secured debt limit – Dividend declaration – Supervisory policies – Auditor appointment – PCA framework for NBFCs – Pandemic impact |
| Primary Dealers (PDs) | – Evolution of PDs – Eligibility conditions – Roles & responsibilities – Liquidity support from RBI – Operations & performance – Financial performance of SPDs – Operational, regulatory & supervisory provisions – Investment guidelines – Capital adequacy & risk management |
Also Check: Process to download the CAIIB Certificate
What is included in the appendix of the central banking syllabus?
The detailed syllabus for Module appendix is as follows:
| Topic | Details |
| Important References | – Important Committees set up by RBI – Major international financial institutions: genesis, objectives & functions – A note on cryptocurrencies & CBDC – RBI discussion paper/report on sustainable finance – Glossary of central banking terms |
What are the paper-wise CAIIB 2026 exam dates for the May-June cycle?
The CAIIB 2026 May-June cycle will be conducted online from 31st May 2026 to 21st June 2026. The details of the paper wise exam dates are as follows:
| Paper / Subject | Exam Date |
| Advanced Bank Management (ABM) | 31st May 2026 |
| Bank Financial Management (BFM) | 7th June 2026 |
| Advanced Business & Financial Management (ABFM) | 13th June 2026 |
| Banking Regulations & Business Laws (BRBL) | 14th June 2026 |
| Elective Paper (Rural Banking / HRM / IT & Digital Banking / Risk Management / Central Banking) | 21st June 2026 |
Also Check: CAIIB Admit Card 2026
What are the paper-wise exam dates for the November-December 2026 CAIIB cycle?
The CAIIB 2026 November-December cycle will be conducted online from 6th December 2026 to 27th December 2026. The details of the paper wise exam dates are as follows:
| Paper / Subject | Exam Date |
| Advanced Bank Management (ABM) | 6th December 2026 |
| Bank Financial Management (BFM) | 12th December 2026 |
| Advanced Business & Financial Management (ABFM) | 13th December 2026 |
| Banking Regulations & Business Laws (BRBL) | 20th December 2026 |
| Elective Paper (Rural Banking / HRM / IT & Digital Banking / Risk Management / Central Banking) | 27th December 2026 |
FAQs
Banking professionals seeking in-depth knowledge of central banking and monetary policies should take it.
Yes, both theoretical and practical aspects of monetary and credit policies are included.
Yes, it includes legal framework, risk management, investment patterns, and adequacy of reserves.
Yes, the syllabus details LAF, open market operations, and RBI strategies during crises like COVID-19.
Yes, the syllabus explains transparency, credibility, and communication strategies of RBI.
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