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12. What is the difference between nationalized banks 18. Tell us something about BSBDA.
and private banks? BSBDA stands for Basic Savings Bank deposit account.
A nationalized bank is owned by the govt. of that country BSBDA is the new name for “no-frill accounts” under which
and is also known as public sector bank whereas a private anyone can open a bank account with even zero balance in
sector bank is owned by an independent individual or it or “zero balance account”. This BSBDA is aimed at
company. providing banking facilities to weaker section of the
society and improve financial inclusion. All scheduled
commercial banks in India including foreign banks with
branches in India have to avail BSBDA. Important:-
13. What are the Non-Performing assets of a company?
Such accounts are opened with “relaxed KYC norms”.
A NPA is an obligation payable to the bank which has not
Relaxed KYC norms include an affidavit by the
been made or the interest and principal amount has not Pradhaan or councilor of a village or area confirming
been paid on the due time. NPA is the loan or credit
about the person concerned.
provided by the bank to its customers which could not be
In such accounts there are certain restrictions- in a
recovered in due time. Thus NPA is somehow not yielding month, 4 withdrawls can be done at a maximum. This
any income to the lender either in the form of principal or
includes ATM withdrawls. The amount withdrawn in a
interest payments. NPA is also known as “bad debts”.
month shouldn’t exceed Rs. 10,000 and the balance in
NPA is shown at the assets side of the balance sheet
the account at anytime shouldn’t exceed Rs. 50,000.
whereas deposits are shown at the liability side.
If there is any recent story or news regarding NPA,
19. What is the meaning of “base rate”?
then revise it thoroughly. For ex:- Recently, United
Base Rate is the minimum rate of interest which a bank has
bank of India was marred in loss due to its rising NPA.
to charge from its customers and a bank can’t sanction
So was the case with Kotak Mahindra Bank.
loan on a rate below the base rate. This rate came into
effect from July 1 2010. Before Base rate there was Basic
14. What are the various risks that banks face? Prime Lending Rate or BPLR introduced in 2003. It was
Sir, there are mainly three types of risks faced by banks:-
replaced with Base Rate because in BPLR banks had an
Credit Risk: - loan or NPA.
option to loan their special customers below BPLR. Banks
Market Risk: - Money invested in the market.
may choose any benchmark to decide on the base rate. The
Operational risk: - Day-to-Day working risks.
exceptions of base rate are:-
Agriculture loans
15. What do you mean by term “CASA” related to bank?
Govt. sponsored schemes
CASA stands for Current Account Savings Account. The
Staff loans
CASA ratio shows how much deposit a bank has in the
Only under the above cases, bank can lend below base rate.
form of current and saving account deposits in the total
20. We hear regularly that all bank branches are
deposit. A higher CASA ratio means better operating turning CBS. What is CBS?
efficiency of the bank because on current account there is
Sir, CBS stands for CORE banking solutions under which
no interest payable whereas on savings account a tiny
the branches of the banks are interconnected with each
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other through intra net with a central database server. 26. What are the steps taken by banks to promote
Now, with this facility, a person having an account in a financial inclusion?
certain branch of the bank can operate from any other Publicity of banks so that more and more people open
branch of the same bank. He need not visit the same the accounts.
branch to operate his account. The CORE word in CBS BSBDA so that poor people can also open their
stands for Centralized Online Realtime Exchange. account.
People with agriculture land are being provided with
21. What is Para Banking? Kisan Credit Card.
Para Banking includes all the services provided by banks General Purpose Credit card provided to people with
apart from day to day banking. For example: - Debit cards, no agricultural land where maximum limit of
Credit cards, Life Insurance products, Cash Management withdrawal is Rs.15,000 and rate of interest is 4%.
services etc. Ultra small banking and banking correspondents.
CRISIL has made an index to calculate financial
inclusion named as “CRISIL INCLUSIX” and in June
2013, there was 40% financial inclusion as per the
index.
Q5. What is “Fiscal Deficit”? Q8. What are Co-operative banks? Ans. Co-operative
Ans. It refers to the excess of all expenditures, which banks are organized under the provision of co-operative
includes the capital and revenue plus net lending over total credit society’s law of state. The major beneficiary of this
revenue receipts and external grants. This explains the bank is agricultural sector.
total expenditure and borrowing by the government.
Q9. Which is the first bank that was incorporated at
Banking structure questions the initiative of World Bank and in which year?
Q11. In which year Indian Banks Association (IBA) was Q22. Which bank comes under the category of APEX
formed and initially with how many members? banks.
Ans. IBA was formed in 26 September, 1946 with 22 Ans. Reserve Bank of India (RBI) and National Bank for
members. Agriculture and Rural Development (NABARD) come
under the category of APEX banks.
Q12. What is KYC?
Ans. KYC is the acronym for “know your customer”, which Q23. Which kind of operations are included in
is termed for the process of proper identification of treasury operations?
account holder. Ans. The treasury operations include the following:-
DEBT MARKET
Q13. What is CRAR? EQUITY MARKET
Ans. The Reserve Bank of India had made a norm that MUTUAL FUNDS
every bank has to maintain an adequate amount of capital DERIVATIVES
on continuous basis and this adequacy of capital is FOREX OPERATIONS
measured in terms of CAPITAL TO RISK-WEIGHTED TRADING
ASSEST RATIO which is also known as CRAR.
2. What do you mean by post dated cheque?- When the date of the cheque is beyond the date on
which the cheque is presented for payment, the cheque is considered to be post dated. For
example, when a cheque dated: 10.02.2013 is presented for payment on 10.01.2013, it is
considered to be a post dated cheque.
3. What do you know by current chest? - Currency chests are operated by RBI so that they can
provide good quality currency notes to the public. However, RBI has appointed commercial banks
to open and monitor currency chests on behalf of RBI. The cash kept in currency chests is
considered to be kept in RBI and
5. What do you mean by tax deduction at source? TDS means tax deducted at source. Banks must
deduct tax from the interest paid on the fixed deposit when the interest paid on fixed deposits
to a customer exceeds Rs. 10000/- during the accounting year. TDS is applicable to fixed deposits
only and is applicable to savings bank deposits.
6. What do you mean by weaker sections? - The following categories are termed as weaker
sections namely - small business enterprises; marginal farmers; artisans/village and cottage
industries for whom loans are granted upto Rs. 50000.00; SGSY beneficiaries; SC/ST
beneficiaries; DIR beneficiaries; SJSRY beneficiaries; SLRS; self help groups and people belonging to
minority community.
7. What do you know by MICR? - MICR means magnetic ink character recognition. Nowadays,
the cheques are issued in MICR formats in metropolitan centres namely; Mumbai, Chennai,
Kolkata, Bangalore etc. The MICR code is readable by a reader sorter computer which helps in
quick sorting of the cheques towards immediate adjustment of the amount to be received and paid
by the banks in the clearing house. MICR code consists of the following namely; the cheque
number, name of the city, name of the bank, name of the branch, account category etc. and banks
simply type the amount of the cheque in the MICR portion using scanners so that the sorter
reader is able to read the entire information in regard to the cheque instantaneously.
8. What do you mean by cheque truncation? - Under cheque truncation, the physical cheque is
replaced by the digital image of the cheque after scanning. Once the cheque is truncated the
physical cheque is cancelled and from the moment of truncation only the digital image has life.
The digital image of the cheque which contains the digital signature of a bank officer as to its
authenticity is processed by all banks and payment is effected. Cheque truncation helps in quick
processing of the cheques drawn even on far away places since there is no necessity to physically
move the cheque from one place to another place.
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9. What do you mean by ECS?- ECS means electronic clearing service and this facility is used
where a large number of small value payments or receipts are to be made or received. ECS can
be used for either debit transactions or credit transactions. When a company wants to pay
dividends to large number of shareholders, they use ECS credit facility and by debiting the
company's account, the shareholders accounts are credited with the dividend amount
instantaneously. Similarly when an accountholder can use ECS debit facility towards effecting
payment to telephone charges each month.
10. What do you mean by bank assurance? Hither to banks were dealing with acceptance of
deposits and lending loans to the customers apart from undertaking certain ancillary services.
Nowadays banks started selling insurance policies of prominent insurance companies by having
tie up arrangements with such companies and banks earn commission for such transactions.
11. What do you mean by Universal banking? - Universal banking is the concept under which
banks can provide various types of services namely; deposits, loans, safe deposit lockers, safe
custody services, dealing with mutual fund schemes, selling insurance policies, selling gold coins,
dealing with issue of shares and debentures etc. Thus at present banks are becoming like a
supermarket for all kinds of financial products and such concept is called as universal banking.
12. What do you mean by Regional Rural Banks? - The Regional Rural Banks are relatively new
banking institutions which were added to the Indian banking scene since October, 1975. The
distinctive feature of a rural bank is that though it is a separate body corporate with perpetual
succession and common seal, it is very closely linked with the commercial bank which has
sponsored the proposal to establish it.
13. What do you mean by National Housing Bank?- National Housing Bank was established under
the National Housing Bank act, 1987 as an apex body and the key function of National Housing Bank
is the development of the housing sector and it is a wholly owned subsidiary of Reserve Bank of
India. National Housing Bank undertakes the following activities namely; promotion and
development of housing finance companies; regulation and supervision of housing finance
companies and providing both direct finance and indirect finance to housing sector.
14. What do you mean by NABARD? - National Bank for agriculture and rural development was
set up in 1982 as an apex development bank in the field of agricultural finance and rural
development. NABARD is set up by the Government for the purpose of facilitating credit flow
for promotion and development agriculture and integrated rural development. It covers
supporting all other allied economic activities in rural areas, promoting sustainable rural
development and ushering in prosperity in the rural areas.
15. What do you mean by EXIM Bank? - Export and Import Bank of India was set up during the
year, 1982 for the purpose of financing, promoting and facilitating foreign trade in the country. It
is wholly owned by the Government of India. The bank apart from enhancing exports from the
country, integrates the country's foreign trade and investment with the overall economic growth.
16. What do you mean by SIDBI? - SIDBI was established for the purpose of assisting and
promoting small scale industry. It was established on 2.4.1990. It is the principal financial
institution established for the promotion, financing and development of industry in the small scale
sector and to coordinate the functions of the institutions engaged in the promotion and financing
or developing industry in the small scale sector.
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17. What do you mean by NBFCs? - Non Banking Finance Companies provide finance for small
ventures but at the same time they are more customer oriented and operate at low volumes
compared to the banks. They also collect deposits from customers and offer slightly higher
interest rates on deposits compared to the banks.
18. What do you mean NEFT and RTGS - The two options namely - national electronic funds
transfer and RTGS - real time gross settlement offered by Reserve Bank of India allow electronic
transfer of funds from the remitter who has an account in one bank to the beneficiary who has
account in any other bank/branch. The transfer can be carried out using the internet banking
facility. The minimum amount that can be transferred by RTGS is Rs. 2.00 lakh and there is no such
limit for transfer through NEFT. It is settled in batches at times defined by the Reserve Bank of India.
RTGS transactions are settled continuously as and when they are put through. The transfer of funds
through NEFT and RTGS can also be carried out by submitting the remittance form at the remitter's
bank branch.
19. What do you mean IFSC code? - IFSC means Indian financial system code. It is a eleven digit
code to identify the bank branch. IFSC code is used while transferring the funds using RTGS and
NEFT payments.
20. What do you mean by financial inclusion? In spite of vast growth in the banking system, a large
number of poor people are still not served by any bank. They are living outside the purview of
any bank. Financial inclusion is delivery of financial services at an affordable cost to the vast
population of disadvantaged/low incomes sections of the society
21. What do you mean No frill accounts? No frill accounts are accounts with very low or nil
minimum balance as well as charges to be opened by the banks as targeted by Reserve Bank of
India. KYC norms are relaxed for opening no frill accounts so that people living in rural and semi
urban areas can open the accounts conveniently. Overdrafts upto Rs. 25000.00 are allowed in the no
frill accounts
22. What do you mean by narrow banking? - It is the system of banking under which the bank
accepts deposits from the public and places the funds accepted in 100 percent risk free assets
with maturity matching for its liabilities. The bank takes no risk of lending at all.
23. Who are business facilitators and business correspondents? - RBI has permitted the banks to
use the services of business facilitators and correspondents with effect from 2006. The services of
non-governmental officers, microfinance institutions and civil society organizations can be
utilized by the banks. They help the banks in identifying the borrowers processing their
applications etc. without involving in business transactions. No approval of RBI is necessary.
Correspondents will do all the above and will also participate in business transactions in a small way.
24. What do you mean by non performing assets? - Non performing assets means bad loans.
When the principal and interest in the account becomes overdue for more than 90 days, it is
treated as non performing assets. Non performance assets are classified into sub standard assets,
doubtful assets and loss assets. Banks are willing to keep the level of non performance accounts at
the lowest.
25. What do you mean by priority sector advance? - In order to boost development of agriculture
and industries, Government of India has stipulated certain norms under which banks are in a
position to allocate 40 percent of their advances exclusively to certain categories of borrowers
called as priority sector advances. The following are classified into priority sector advances namely
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- retail traders, small business, professional and self employed; agriculture; small scale
industries, self help groups, differential rate of interest and SC/ST beneficiaries
26. What do you mean by merchant banking? - Merchant banking stands for provision of
various services to corporate clients by helping them to access capital market. Merchant
banks help the corporate customers to approach the capital market with initial public offers
for the purpose of collection of capital by way of shares.
27. What do you mean by demat accounts? Demat means dematerialization. During the early days,
shares and debentures certificates were issued in physical form in the form of certificates. At
present, they are issued in electronic form. It is the process by which paper securities are
converted to electronic form so that they can be stored, sold and transferred easily.
28. What is a depository? - A depository holds the securities of the investors in electronic form.
In our country there are two depositories namely; NSDL - National Securities Depositories
Limited promoted by National Stock Exchange and CDSL - Central Depository Services Limited
promoted by Bombay Stock Exchange.
29. What do you know by consortium financing? When a corporate is in need of huge finance - say
Rs. 200 crores and above, banks join together and extend the loan facilities by sharing the loan
amount between themselves. This reduces the risk for each bank. The banks jointly process the
application of the borrower and sanction the advance and this is called consortium lending.
30. What do you mean by repo rate? - It is the rate at which RBI lends short term funds to the
commercial banks against securities. In order to temporarily expand the money supply, the
central bank decreases repo rates enabling the banks to swap the government securities for cash.
Repo is the abbreviation of Repurchase and to contract the money supply RBI increases the repo
rates.
31. What do you mean reverse repo ? - The reverse repo rate is the interest rate that banks
receive if they deposit money with the central bank. This reverse repo rate is always lower than the
repo rate. Increases or decreases in the repo and reverse repo rate have an effect on the interest
rate on banking products such as loans, mortgages and savings.
32. What do you mean by CRR? - CRR means Cash Reserve Ratio and as per the stipulations by
Reserve Bank of India, all banks are in a position to maintain a certain percentage of their
deposits (technically called as net demand and time liabilities) in their account with the RBI. CRR
ranges from 5 percent to 15 percent. By increasing CRR by merely 0.25 percent, an amount of Rs.
15000 crores of liquid funds can be transferred from the commercial banks to the coffers of RBI.
When CRR is reduced, the liquid funds are transferred from RBI to commercial banks.
33. What do you mean by SLR? - Statutory Liquidity Ratio refers to the stipulation by RBI that
approximately 25 percent of the banks deposits is to be kept in the form of government securities,
gold and cash. Primarily SLR refers to the amount invested by the banks in Government of India
securities. RBI has the right to change the statutory liquidity ratio from time to time. On reduction
of SLR, the availability of funds for the banks moves up and banks tend to more loans to the
common public. In the case of increase in SLR, banks reduce bank lending.
34. What do you mean by PLR? - Prime lending rate is the rate at which commercial banks are
willing to lend to their triple A rated No 1 borrowers. The lending rates by the bank for other
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borrowers whose credit worthiness is low will be more than prime lending rate. RBI has
deregulated the lending rates that are to be charged by the banks for advance above Rs. 2 lakhs.
35. What do you mean by BPLR? - It is the rate at which commercial banks must charge to all
their advances less than Rs. 2 lakhs.
36. Who is a non resident Indian? - Non resident Indian is the person who is the Indian citizen
who is residing in abroad for more than 182 days and has gone for abroad for the purposes
namely; business, studies and employment.
37. What are the different types of accounts that can be opened by Non Resident Indians? - Non-
resident ordinary account, Non-resident External account, FCNR account and RFC account.
38. What are the different currencies in which FCNR accounts can be opened? - FCNR accounts
can be opened in the following currencies namely; US dollar, pound sterling, Euro, Australian
dollar, Japanese Yen and Canadian dollar. FCNR accounts can be opened for a minimum period of
one year and maximum period of three years
39. What are the traditional functions of RBI? - The traditional functions of RBI are - issue of
currency, forex management, export assistance, clearing house functions, change of currency,
transfer of currency, publication of statistics and other information and training in banking.
40. What are the developmental functions of RBI? - The developmental functions of RBI are -
agriculture development, promotion of industrial finance, promotion of export through
refinance, development of bill market, development and regulation of banking system.
41. What are the regulatory functions of RBI? - The regulatory functions of RBI are – qualitative
credit control, bank rate, differential rate of interest, open market operations, Maintenance of
CRR and SLR, direct action, credit authorization scheme and moral persuasion
42. What are the different types of financial institutions in our country? - The various financial
institutions in our country are - RBI - Reserve Bank of India; SEBI - Securities and Exchange Board
of India and IRDA - Insurance Regulatory and Development Authority of India. RBI monitors the
various banks in the country; SEBI monitors and regulates capital markets and IRDA monitors the
functions of insurance companies.
43. What are the different types of banks in our country? - In our country the following banks are
available - savings banks; commercial banks; industrial banks; development banks; land
development banks; indigenous banks; central bank; cooperative banks; exchange banks and
consumer banks
44. What are the different types of secondary functions of any bank? - They are agency or
representative functions; general utility services and social development functions.
45. What do you mean by agency or representative functions of any bank? - They are collection
and payment of various items; purchase and sale of securities; trustee and executor; remitting
money; purchase and sale of financial exchange; letter of references and other agency functions.
46. What are the general utility services offered by the banks? - They are locker facilities;
business information; help in transportation of goods; acting as a referee; issuing of letters of
credit; acting as underwriters; issue of traveler cheques; issue of gift cheques and dealing in
merchant banking activities
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47. What are the social development functions of a bank ? - They are capital formation;
inducement to innovations; impact on the rate of interest; role on the development of rural
sector; helping in pushing up the demand
48. Can you name some items which are covered under negotiable instruments act? - They are
promissory notes, bills of exchanges; cheques, exchequer bills; circular notes; dividend warrants;
share warrants; bearer debentures; bank notes and bank drafts
49. What is a Payment Bank? - Payment Bank is a entity which will allow you to open Savings and
Current Account like the other Banks. However, the difference is that a Payment Bank can be your
mobile operator or supermarket chain(eg. Big Bazar) or even a NBFC.
50. What Makes Payment Banks Different From Normal Banks? - Payment Banks helps the
customer to handle cash a lot easier by providing privileages like transferring money from your
Mobile Phones to any bank account or another mobile phone customer and also you can recieve the
money similar way. The added advantages are paying bills, paying at the Shopping Retailers and
recharges etc.
51. Why Payment Banks? - India has a vast growing Mobile Users Database with over 91 Crore
customers. So basically providing the service will increase the Financial Inclusion Programme.
Basically it will help the citizen a lot on the other hand it will boost up the financial inclusion.
Payment Banks will give an interest to the customer's account each year similar like Banks.
The only thing Payment Banks will note provide is Giving Out LOANS.
The RBI has stipulated that every payments bank must have an equity capital of 100 crore to
start off and maintain a capital adequacy of 15 per cent. Apart from these, it will need to
meet cash reserve requirements and needs to invest in specific securities to meet the
statutory liquidity ratio. All these amounts are to be invested in government securities or
treasury bills. Promoter’s holding must be at least 40 per cent for the first five years, and
eventually reduced to 26 per cent over 12 years.
NACHIKET MORE COMMITTEE is the officially appointed Committee which recommended
Payment Banks to increase the Financial Inclusion Programme.
Nachiket More Committee is also known as ‘Committee on Comprehensive Financial
Services for Small Businesses and Low-Income Households’.
Speculations as of 13th August, 2014 are that Western Union, Bharti Airtel, Vodafone are
interested in Payment Banks. It is said that Bharti Airtel is teaming up with State Bank of
India to set up Payment Banks.
The first bank who produced ATM was HSBC in the year 1987 in Mumbai. After that ATM has
been installed in many places. But the problem occurred when RBI noticed that the
installation of ATMs have not been initiated in the Rural areas of India. Although SBI or State
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Bank of India has the largest ATM network, yet the rural areas are neglected. Mainly the
Urban and Developed areas had the most ATMs. You will notice more ATMs in Shopping
Malls, Movie Theatres, Sports Arena, Entertainment Parks but less in Rural areas, villages.
This has affected the Financial Inclusion program.
To increase the Financial Inclusion, RBI issued guidelines for Non-Banking Financial
Companies to set up White Label ATMs or WL-ATM.
Usually we have seen ATMs with Bank's Logo in it, making it sure that the bank has installed
the ATM in that location. But White Label ATMs does not have any Bank logo in it. It is
installed by any Non-Banking Entity.
52. How does White Label ATM work? - It is like the outsourcing of bank's payment service. Earlier
bank's had to install ATMs using their Logos and security and other maintenance staffs. But with the
White Label ATMs banks now only need to fill the White Label ATMs with cash. Suppose a NBFC
named XYZ Ltd. opens a White Label ATM with the name "ABC". Now they will have a bank as
sponsor. Suppose MNO Bank is the sponsor. So now, XYZ will install and set up their White Label
ATMs and keep the maintenance staff and securities while MNO Bank will make sure the White
Label ATMs are having sufficient cash. The outcome of this system is that banks now will not need to
worry about maintenance and other things.
53. Do White Label ATMs charge the customer? - No, as per RBI guidelines they cannot charge the
customers directly. However, they charge from banks and the banks charge it from Customer's
account.
54. Summary of White Label ATM - Basically the main motive is to increase the financial inclusion.
As the NBFCs has to install White Label ATMs in a ratio of 1 Urban White Label ATM is to 2 Rural
White Label ATMs. So when they try to install 1000 White Label ATMs in a Urban Location they will
have to install 2000 White Label ATMs in the Rural Areas. It will increase the Rural participation in
Financial Inclusion.
Facts
IndiCash of Tata Communications Payment Solution Limited(TCPSL) was the first White Label
ATM in India.
More than 15 companies including Tata, Muthoot, Prizm Payments, Srei Infra., Vakgrangee
Software, AGS have been given permission of White Label ATMs by Reserve Bank of India.
Any NBFC or any non-bank entity with a minimum net worth of Rs.100 crore can apply for
White Label ATMs. However it is completely on RBI whether they will give permission or not.
The 5 transactions are free on a monthly basis but after that the White Label ATMs will
charge 15 rs per transaction and 5 rs per balance inquiry. These charges will later reflect on
the customer's bank account statement.
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Top 50 Banking
Interview Questions
Basic Questions on Banking Industry for IBPS and SBI Interviews
Powered by
www.Gr8AmbitionZ.com
your A to Z competitive exam guide
1. Why do you want to enter banking?
Banking is one of the fastest growing sectors in India with more stable and high
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growth and more over providing wide range of career opportunities for graduates.
So I want to take an opportunity to join in a bank.
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2. What is the difference between Cheque and Demand Draft?
Both are used for transfer the amount b/w two accounts of same or different Bank.
Cheque is written by an individual and withdrawn from the account whereas
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Demand draft is issued by a bank where you have to pay before issuing.
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3.What are NBFCs and difference between NBFCs and Bank?
Non-bank financial companies (NBFCs) are financial institutions that provide
banking services, but do not hold a banking license. NBFCs do offer all sorts of
banking services, such as loans and credit facilities, retirement planning, money
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markets, underwriting, and merger activities. These institutions are not allowed to
take deposits from the public.
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4. What is Private Banking?
Banking services offered to high net-worth individuals. Private banking institution
assists the high net-worth individual in investing his/her money in exchange for
commissions and fees. The term "private" refers to the customer service being
rendered on a more personal basis.
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customer's account balance instantly. Computers help a bank save time and
money, and can be used as an aid to generate profits.
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to the people having low credit rating.
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8 What is a Repo Rate?
Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the
banks have any shortage of funds they can borrow it from RBI. A reduction in the
repo rate will help banks to get money at a cheaper rate. When the repo rate
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increases, borrowing from RBI becomes more expensive
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9. What is Reverse Repo Rate?
This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve
Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels
there is too much money floating in the banking system. Banks are always happy
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to lend money to RBI since their money is in safe hands with a good interest. An
increase in Reverse repo rate can cause the banks to transfer more funds to RBI
due to this attractive interest rates.
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10 What is CRR Rate?
Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with
RBI. If RBI decides to increase the percent of this, the available amount with the
banks comes down. RBI is using this method (increase of CRR rate), to drain out
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maintain in the form of cash, or gold or govt. approved securities (Bonds) before
providing credit to its customers. SLR rate is determined and maintained by the
RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR
is determined as the percentage of total demand and percentage of time liabilities.
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Time Liabilities are the liabilities a commercial bank liable to pay to the customers
on their anytime demand. SLR is used to control inflation and propel growth.
Through SLR rate tuning the money supply in the system can be controlled
efficiently.
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13. What is Inflation?
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Inflation is as an increase in the price of bunch of Goods and services that projects
the Indian economy. An increase in inflation figures occurs when there is an
increase in the average level of prices in Goods and services. Inflation happens
when there are fewer Goods and more buyers; this will result in increase in the
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price of Goods, since there is more demand and less supply of the goods.
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14. What is Deflation?
Deflation is the continuous decrease in prices of goods and services. Deflation
occurs when the inflation rate becomes negative (below zero) and stays there for a
longer period.
reported below are based upon the prime rates on the first day of each respective
month. Some banks use the name "Reference Rate" or "Base Lending Rate" to
refer to their Prime Lending Rate.
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volumes which has an impact on the stock markets. Institutional Investors includes
pension funds, mutual funds, Insurance Companies, Banks, etc.
18 . What is FDI?
FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets
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or a significant amount of ownership (stock) of a company in another country in
order to gain a measure of management control” (Or) A foreign company having a
stake in a Indian Company.
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19 What is IPO?
IPO is Initial Public Offering. This is the first offering of shares to the general
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public from a company wishes to list on the stock exchanges.
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20. What is Disinvestment?
The Selling of the government stake in public sector undertakings.
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21. What is Fiscal Deficit?
It is the difference between the government’s total receipts (excluding borrowings)
and total expenditure.
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22 What is Revenue deficit?
It defines that, where the net amount received (by taxes & other forms) fails to
meet the predicted net amount to be received by the government.
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income is often used to measure a country's standard of living.
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27 . What is SEZ?
SEZ means Special Economic Zone is the one of the part of government’s policies
in India. A special Economic zone is a geographical region that economic laws
which are more liberal than the usual economic laws in the country. The basic
Z.
motto behind this is to increase foreign investment, development of infrastructure,
job opportunities and increase the income level of the people.
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28 Functions of RBI?
The Reserve Bank of India is the central bank of India, was established on April 1,
1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
iti
The Reserve Bank of India was set up on the recommendations of the Hilton
Young Commission. The commission submitted its report in the year 1926, though
the bank was not set up for nine years.To regulate the issue of Bank Notes and
keeping of reserves with a view to securing monetary stability in India and
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generally to operate the currency and credit system of the country to its
advantage." Banker to the Government: performs merchant banking function for
the central and the state governments; also acts as their banker.Banker to banks:
maintains banking accounts of all scheduled banks. 29 What is monetary policy?
A Monetary policy is the process by which the government, central bank, of a
8A
country controls
(i) the supply of money,
(ii) availability of money, and
(iii) cost of money or rate of interest, in order to attain a set of objectives
oriented towards the growth and stability of the economy.
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influence the economy. These policies affect tax rates, interest rates and
government spending, in an effort to control the economy. Fiscal policy is an
additional method to determine public revenue and public expenditure.
31 What is bank and its features and types?
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citizens of India access to records of the Central Government and State
overnments.The Act applies to all States and Union Territories of India, except the
State of Jammu and Kashmir - which is covered under a State-level law. This law
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was passed by Parliament on 15 June 2005 and came fully into force on 13
October 2005.
33 What is Cheque?
Z.
Cheque is a negotiable instrument instructing a Bank to pay a specific amount
from a specified account held in the maker/depositor's name with that Bank.A bill
of exchange drawn on a specified banker and payable on demand.“Written order
on
directing a bank to pay money”.
iti
A demand draft is an instrument used for effecting transfer of money. It is a
Negotiable Instrument. Cheque and Demand-Draft both are used for Transfer of
money. You can 100% trust a DD. It is a banker's check. A check may be
dishonored for lack of funds a DD can not. Cheque is written by an individual and
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Demand draft is issued by a bank. People believe banks more than individuals.
35 What is a NBFC?
A non-banking financial company (NBFC) is a company registered under the
8A
Companies Act, 1956 and is engaged in the business of loans and advances,
acquisition of shares/stock/bonds/debentures/securities issued by government, but
does not include any institution whose principal business is that of agriculture
activity, industrial activity, sale/purchase/construction of immovable property.
NBFCs are doing functions akin to that of banks; however there are a few
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differences:
(i)A NBFC cannot accept demand deposits (demand deposits are funds deposited
at a depository institution that are payable on demand -- immediately or within a
very short period -- like your current or savings accounts.)
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(ii) it is not a part of the payment and settlement system and as such cannot issue
cheques to its customers; and
(iii) Deposit insurance facility of DICGC is not available for NBFC depositors
unlike in case of banks.
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36 What is NABARD?
NABARD was established by an act of Parliament on 12 July 1982 to implement
the National Bank for Agriculture and Rural Development Act 1981. It replaced
the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell
(RPCC) of Reserve Bank of India, and Agricultural Refinance and Development
m
Corporation (ARDC). It is one of the premiere agency to provide credit in rural
areas. NABARD is set up as an apex Development Bank with a mandate for
facilitating credit flow for promotion and development of agriculture, small-scale
co
industries, cottage and village industries, handicrafts and other rural crafts.
37 What is SIDBI?
Z.
The Small Industries Development Bank of India is a state-run bank aimed to aid
the growth and development of micro, small and medium scale industries in India.
Set up in 1990 through an act of parliament, it was incorporated initially as a
on
wholly owned subsidiary of Industrial Development Bank of India.
iti
SENSEX is the short term for the words "Sensitive Index" and is associated with
the Bombay (Mumbai) Stock Exchange (BSE). The SENSEX was first formed on
1-1-1986 and used the market capitalization of the 30 most traded stocks of BSE.
Where as NSE has 50 most traded stocks of NSE.SENSEX IS THE INDEX OF
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BSE. AND NIFTY IS THE INDEX OF NSE.BOTH WILL SHOW DAILY
TRADING MARKS. Sensex and Nifty both are an "index”. An index is basically
an indicator it indicates whether most of the stocks have gone up or most of the
stocks have gone down.
8A
39 What is SEBI?
SEBI is the regulator for the Securities Market in India. Originally set up by the
Government of India in 1988, it acquired statutory form in 1992 with SEBI Act
1992 being passed by the Indian Parliament. Chaired by C B Bhave.
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and offer to sell and buy back its shares on a continuous basis and use the capital
thus raised to invest in securities of different companies. The mutual fund will
have a fund manager that trades the pooled money on a regular basis. The net
proceeds or losses are then typically distributed to the investors annually. A
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company that invests its clients' pooled fund into securities that match its declared
financial objectives. Asset management companies provide investors with more
diversification and investing options than they would have by themselves. Mutual
funds, hedge funds and pension plans are all run by asset management companies.
These companies earn income by charging service fees to their clients.
m
41 What are non-perfoming assets?
Non-performing assets, also called non-performing loans, are loans,made by a
bank or finance company, on which repayments or interest payments are not being
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made on time. A debt obligation where the borrower has not paid any previously
agreed upon interest and principal repayments to the designated lender for an
extended period of time. The nonperforming asset is therefore not yielding any
income to the lender in the form of principal and interest payments.
Z.
42 What is Recession?
on
A true economic recession can only be confirmed if GDP (Gross Domestic
Product)growth is negative for a period of two or more consecutive quarters.
iti
43 What is foreign exchange reservers?
Foreign exchange reserves (also called Forex reserves) in a strict sense are only
the foreign currency deposits and bonds held by central banks and monetary
authorities.However, the term in popular usage commonly includes foreign
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exchange and gold,SDRs and IMF reserve positions.
44. What is the difference between Nationalized bank and Private Bank ?
A Nationalized bank is one that is owned by the government of the country. Since
8A
the people decide who the government is, they are also referred to as public sector
banks. The government is responsible for the money deposited into the accounts of
these banks. Where as a private sector bank is one that is owned by an independent
individual or a company that is controlled by a few individuals. In short, the bank
is owned by someone else and they run the bank. The person owning/running the
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bank is responsible for the money deposited into the accounts of these banks.
anticipate and manage the needs of the customer, interaction and relationship
resulting in increased profitability through revenue and margin growth and
operational efficiencies.
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product/commodity (say spot rate) called underlying (that may be a stock, stock
index, a foreign currency, a commodity). Forward contract in foreign exchange
transaction, is a simple form of a derivative.
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48. What is Bancassurance ?
Bancassurance stands for distribution of financial products particularly the
Z.
insurance policies (both the life and non-life), also called referral business, by
banks as corporate agents, through their branches located in different parts of the
country.
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49. What is LAF ?
Liquidity Adjustment Facility (LAF) was introduced by RBI during June, 2000 in
iti
phases, to ensure smooth transition and keeping pace with technological
upgradation.
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50. What is Money Laundering ?
Money laundering means acquiring, owning, possessing or transferring any
proceeds (of money) of crime or knowingly entering into any transaction related to
proceeds of the crime either directly or indirectly or concealing or aiding in the
concealment of the proceeds or gains of crime, within or outside India. It is a
8A
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03/12/2015 IBPS PO Interview Questions and Answers pdf
BANKERS AMBITION
HOME COMPUTERS ENGLISH BANKING AWARENESS
IBPS PO and Clerk Exams » Ultimate SBI and IBPS PO & Clerk Interview Questions
and Answers pdf
Ultimate SBI and IBPS PO
& Clerk Interview
Questions and Answers
pdf
NOVEMBER 30, 2014 BY DUSHYANT SHRIVASTAVA 85 COMMENTS
How to Prepare for IBPS PO and Clerk Interviews. Questions based
on Experience!
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Greetings from the Team Bankers Ambition! Discover and Leverage for the most
common IBPS and SBI PO Interview Questions and Answers provided in a PDF format
available for free download. The most easy way to enhance your interview skills for
IBPS and SBI Clerk and PO Exams is just about commence. We struggled to be
concise and exhaustive at the same time; and after vacillating for hours came with the
following result that we are going to present before you now!
you may want to visit top 5 common questions asked in interview about
yourself
00:00
For transcript for this audio , visit here
00:00
————————————————————————————————————————————
UPDATE:
Why did you choose soandso bank in your preference list?
While you may have your own reasons for choosing your preference list, visiting
this page may help you with your answer.
For common Interview Preparation Tips for SBI & IBPS, visit an indepth
explanation on this page.
______________________________________________________________________________
SBI and IBPS PO & Clerk Interview Questions and Answers pdf
1. Why do you want to join banking sector?
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Ans. Banking is one of the fastest growing sectors in India providing a wide range of
career opportunities to graduates like me. Besides Banking requires maintaining
excellent rapport with the customers. Being a people’s person, I can very well relate to
this aspect of Banking. I am also well versed with computer knowledge that is now a
MUST in Banking like MS Excel, MS Word, etc.
PS: Don’t say stuff like “stable sector”, “high growth”, or “reputable job”. You
can get in trouble with cross questioning. Also, have some data ready as to why
Banking is the fastest growing sector. Only say stuff that you can back with data!
2. What is a Bank?
Ans. A bank is a financial institution that accepts money from it’s customers for the
purpose of lending.
3. What is a Cheque?
Ans. A Cheque is a negotiable instrument instructing a bank to pay a specific amount
from a specific account. In other words, A cheque is a bill of exchange drawn on a
specified banker and payable on demand. A cheque can be dishonored for variety of
reasons such as insufficient funds, signature mismatch, overwriting, cheque is 3
months+ old (stale), etc.
PS: Cross Questions: What’s a bearer cheque? What’s an Account Payee
Cheque?
4. What is a Demand Draft?
Ans. Demand Draft is a negotiable instrument that is used for effecting transfer of
money. Since it’s a banker’s check, it can’t be dishonored.
PS: Cross Question: What is the difference between Cheque and Demand Draft?
5. What is KYC?
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Ans. KYC stands for ‘Know Your Customer‘. As per KYC guidelines prescribed by RBI,
some personal information of the customer is required while opening an account (or
renewal of old accounts!). The objective is to enable positive identification of customers
by their respective Banks; and to prevent money laundering.
The documents as mandated under KYC guidelines are:
1. Photograph
2. Proof of identity. This includes Aadhar, Pan Card, Driving license, Govt ID, or any
other document acceptable to Branch Manager
3. Proof of address. This includes Ration Card, Electricity Bill, or any other
document acceptable to Branch Manager
PS: Cross Questions can be asked about money laundering.
6. What is Money Laundering ?
Ans. Money laundering means presenting an illegally obtained money as legitimate
by creating a complex chain of sub processes. This convoluted chain makes it difficult
to trace the source of the illegitimate money.
7. What do you know about RBI?
Ans. The Reserve Bank of India is the central bank of India. On the recommendation of
Young Hilton Committee, it was established on 1st April,1935 in accordance with
Reserve Bank of India Act, 1934.
PS: The Young Hilton Committee submitted it’s report in 1926, and it took nine
years to take an action on this report and establish RBI.
8. What are the functions of RBI?
1. Regulate the issuance and circulation of Bank Notes
2. Banker to the Government
3. Banker to Banks
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4. Custodian to Foreign Reserve of the country
5. Lender of last resort
6. Controller of Credit
PS: For an amazing Infographics on RBI, visit here
9. What is a Monetary policy?
Ans. Monetary policy is a type of macroeconomic policy by which central monetary
authority (RBI) controls the interest rates, thereby effecting control over supply of
money in the economy. The primary motive for this policy is to maintain price stability &
achieve high economic growth.
10. What is Fiscal Policy?
Ans. Fiscal policy is a type of macroeconomic policy by which our government makes
a strategic change to its spending and tax rates to influence a nation’s economy. Just
like Monetary Policy, Fiscal Policy is another tool by which country’s economic
conditions can be controlled.
11. What is a Repo Rate?
Ans. Repo Rate is the rate at which RBI lends money to commercial banks. Whenever
any bank faces shortage of funds, it can borrow from RBI. Decreasing Repo Rate will
help banks avail more money at a cheaper rate. Vice versa, Increasing Repo rate will
make borrowing money from RBI more expensive.
PS: For more information on Repo Rate, visit here
12. What is Reverse Repo Rate?
Ans. Reverse Repo rate is the rate at which RBI borrows money from banks. RBI
uses this tool to drain excess money circulating in the banking system. Banks have
absolutely no qualms about lending money to RBI since their money is in safe hands;
not to mention a good interest, too.
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PS: For more information on Reverse Repo Rate, visit here
13. What is LAF ?
Ans. Liquidity adjustment facility (LAF) is a monetary policy tool which allows banks to
borrow money, and adjust their daily liquidity mismatches, through repurchase
agreements. LAF has two components: a) repo (repurchase agreement); and b)
reverse repo. When banks need liquidity to meet its daily requirement, they borrow from
RBI through repo. The rate at which they borrow fund from RBI is called the Repo rate.
When banks have excess liquidity, they park with RBI through the reverse repo. The
rate at which they lend fund to RBI is called the Reverse Repo rate.
14. What is CRR Rate?
Ans. Cash reserve Ratio (CRR) is the percentage of NDTL (Net Demand and Time
Liabilities) that banks have to keep with RBI as cash. If RBI decides to increase the
CRR percentage, the credit available to banks for lending comes down. Thus, RBI can
increase CRR rate to drain out the excess money from the banks.
PS: For more information on CRR, visit here
15. What is Bank Rate?
Ans. Bank rate a.k.a discount rate, is the interest rate at which the central bank (RBI)
charges loans and advances to commercial banks and other financial intermediaries.
Bank rate is yet another tool at the disposal of the central bank (RBI) to effectively
control the money supply.
16. What is SLR Rate?
Ans. SLR (Statutory Liquidity Ratio) is the percentage of it’s NDTL (Net Demand and
Time Liabilities), a commercial bank has to maintain as liquid assets such as cash,
gold or govt. approved securities (a.ka. govt. Bonds) before lending to its customers.
SLR is a type of monetary Policy tool that RBI can use to effectively regulate the
expansion of credit by the banks.
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PS: For more information on SLR, visit here
17. What is PLR?
Ans. The Prime Interest Rate is the interest rate that a bank charges to it’s most
financially sound (or high credit worthy) customers. This rate remains basically the
same for most banks.
PS: From July 1, 2010, Base Rate has replaced the Benchmark Prime Lending
Rate. However, this applies to loans taken after July 1, 2010. All existing loans at
July 1, 2010 continues to be at BPLR. But if such old loans are renewed, they’ll
be linked to Base Rate. Cross Question: What’s the difference between PLR and
Base Rate?
18. What is Base Rate?
Ans. It is the minimum rate of interest that a bank is allowed to charge from its
customers. No bank can offer loans at a rate lower than Base rate to any of its
customers unless mandated by the govt.
19. What is Deposit Rate?
Ans. Interest Rates paid by banks or other financial institutions on the cash deposited
with them by the customer.
PS: To know more on deposits, visit here.
20. What are Basis Points?
Ans. BPS is an acronym for basic points and is used to indicate changes in rate of
interest and other financial instruments.
PS: 1 basis point change corresponds to 0.01% change. So when we say that
repo rate has been increased by 25 bps, it means that the rate has been
increased by 0.25%
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21. What are Treasury Bills?
Ans. Treasury bills ( a.k.a TBills) are the short term money market instrument (bonds)
issued by central government through auctions. These TBills can be issued for 91
days, 182days, or 364 days.
PS: There are no Tbills issued by state government. From 1st April, 1997 Tbills
have been replaced with Ways & Means Advances
22. What are Commercial Papers?
Ans. Commercial papers are short term money market instrument (debts issued in the
form of promissory note) by corporate, primary dealers, or financial institutions. The
maturity period of commercial papers can range from 7 days to 1 year from the date of
issuance.
23. What is the Banking Ombudsman Scheme?
Ans. The Banking Ombudsman Scheme offers an easy and inexpensive platform to
bank customers for lodging their complaints against certain services offered by the
Banks. The Ombudsman sees to it at the complaints of the customers are resolved in a
timely manner. The Banking Ombudsman Scheme is introduced under Section 35 A of
the Banking Regulation Act, 1949 by RBI with effect from 1995.
PS: All Scheduled Commercial Banks, Regional Rural Banks & Scheduled
Primary Cooperative Banks comes under this Scheme.
PS: For more information on Banking Ombudsman, visit here
24. What is a Derivative ?
Ans. A derivative is a financial contract that derives its value from another financial
product. This underlying product may be a stock, foreign currency, a commodity, etc.
Forwards Market is a nice example of derivative trade.
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25. What is Inflation?
Ans. Inflation is as an increase in the price of goods & services that projects the
Indian economy. This rise in prices means the demand for these goods and services
exceeds their supply.
PS: Cross Question: What’s the current index for measurement of Inflation?
How’s WPI different from CPI?
PS: For more information on Inflation, visit here
26. What is Deflation?
Ans. Deflation is the decrease in prices of goods and services. During Deflation,
Inflation rate becomes negative .
PS: Cross Question: Why is deflation bad when there is a decrease in prices?
PS: For more information on Deflation, visit here
27. What is FII?
Ans. FII (Foreign Institutional Investor) used to denote an investor that proposes to
make an investment in Indian securities. Institutional Investors includes pension funds,
mutual funds, Insurance Companies, Banks, etc.
PS: FII doesn’t exist now. A new investor category Foreign Portfolio
Investor(FPI) has been formed by merging FIIs, Sub Accounts and Qualified
Foreign Investors(QFI).
28. What is FDI?
Ans. FDI (Foreign Direct Investment) means injection of foreign funds in Indian
Markets.
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PS: Foreign investment of 10 per cent
or more in a listed company will now
be treated as FDI. Whereas lesser
investment will be treated as FPI.
29. What is IPO?
Ans. IPO stands for Initial Public Offering.
This is the first offering of shares to the
general public by a company who wishes
to enlist itself on the stock exchange.
30. What is GDP?
Ans. The Gross Domestic Product or
GDP is a measure of all of the services
and goods produced in a country over a
specific period (usually one year).
31. What is GNP?
Ans. Gross National Product is measured
as GDP plus income of residents from
investments made abroad minus income
earned by foreigners in domestic market.
32. What is Revenue deficit?
Ans. Where the net amount received by the govt. (from taxes & other forms) is lesser
than the predicted amount, the shortfall amount is called Revenue Deficit.
33. What is Fiscal Deficit?
Ans. It is the difference between the government’s total receipts (excluding
borrowings) and total expenditure.
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34. What is Disinvestment?
Ans. When a government decides to dilute it’s stake in public sector undertakings,
it’s called disinvestment.
35. What is National Income?
Ans. National Income is the money value of all goods and services produced in a
country during the year.
36. What is Recession?
Ans. When GDP (Gross Domestic Product) growth is negative for a period of two or
more consecutive quarters.
37. What causes Subprime crisis?
Ans. The Subprime crisis occurs when the too many loans are given to customers with
low credit rating.
38. What is Dematerialization ?
Ans. Dematerialisation is a process by which the paper certificates of an investor are
taken back by the company/registrar and an equivalent security is credited in the
electronic holdings of that investor.
39. What is a DeMat Account?
Ans. DeMat is just a dematerialized account. One can open a DeMat account if one
wants to buy or sell stocks. In order to open a DeMat account, one needs to approach
the Depository Participants. The advantage of DeMat account is that one doesn’t need
any physical evidence for possessing the shares. All such things are taken care of by
the DPs.
PS: Physically only 500 shares can be traded as per SEBI guidelines. From April
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2006, it’s essential to have PAN for any person opening a DeMat account.
40. What is RuPay Card?
Ans. RuPay is a domestic card payment network set up by National Payments
Corporation of India (NPCI). The initial focus of NPCI is to approach banks that do not
issue cards. Example Regional Rural Banks and urban cooperative banks.
41. What is Private Banking?
Ans. Banking services offered to high networth individuals is called Private Banking.
Financial Institutions offering Private Banking earns commission by providing quality
assistance to their high networth customers in investing their money. By Private, we
mean that the services are provided and tailored on a more personal basis.
42. What is BSBDA?
Ans. On August 10, 2012, RBI mandated that any individual, including poor or those
from weaker section of the society, can open zero balance account in any bank. These
account are called Basic Savings Bank Deposit Accounts.
PS: These guidelines are applicable to all scheduled commercial banks,
including foreign banks having branches in India. No frills accounts, in use
earlier, are now renamed as BSBDA.
43. What is NABARD?
Ans. NABARD (National Bank for Agriculture and Rural Development) is an apex
development bank in India having headquarters in Mumbai. It was established on 12
July 1982 as per National Bank for Agriculture and Rural Development Act 1981. It
replaced the Agricultural Credit Department (ACD), Rural Planning and Credit Cell
(RPCC) of RBI, and Agricultural Refinance and Development Corporation (ARDC). The
primary objective of NABARD is to provide rural credit. NABARD was established on
the recommendations of Shivaraman Committee.
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44. What is SEBI?
Ans. SEBI (Securities and Exchange Board of India) is the regulator for the Securities
Market in India. Originally set up by the Government of India in 1988, it acquired
statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament
chaired by C B Bhave. SEBI has its Headquarters in Mumbai. Controller of Capital
Issues was the regulatory authority before SEBI came into existence.
45. What is SIDBI?
Ans. SIDBI (Small Industries Development Bank of India) is a staterun bank aimed to
aid the growth and development of micro, small and medium scale industries in India.
Set up in 1990 through an act of parliament, it was incorporated initially as a wholly
owned subsidiary of Industrial Development Bank of India.
46. What is SWIFT?
Ans. SWIFT stands for Society for worldwide Interbank financial telecommunication.
Almost all FOREX related messages are sent through SWIFT. SWIFT Code is a
standard format of bank Identifier code. This code is used particularly in International
transfer of money between banks. SWIFT Code consists of 8 or 11 character. In SWIFT
code, first 4 characters are bank code, next 2 characters are country code, next two
characters are location code. The next 3 digits are optional and indicate the branch
code.
PS: For more information on Codes used in Banking Industry, visit here
47. What is the difference between Nationalized bank and Private Bank ?
Ans. A Nationalized bank is one that was once owned privately, but were later brought
under government’s control. This was carried out in two phases. One in 1969 when 14
banks were nationalized. And the other in 1980 when 6 more banks were brought under
govt’s control. A private bank is a bank that is still privately owned.
PS: There’s a difference between Nationalized Banks and Public Sector Banks. Cross
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Question on how many nationalized banks are there?
48. What are NonPerfoming assets?
Ans. Non performing Assets aka NPA refers to bad loans. If the borrower defaults on a
payment (whether principal or interest) for 90 days, the loan is classified as NPA.
49. What is SEZ?
Ans. SEZ means Special Economic Zone is the one of the part of government’s policies
in India. A special Economic zone is a geographical region that has more liberal
economic laws as compared to the rest of the country. This is to increase foreign
investment, development of infrastructure, job opportunities and increase the income
level of the people.
50. What are Mutual funds?
Ans. Mutual funds are investment companies that pool money from investors and
use this capital to invest in securities of different companies. For this, they charge some
commission or fees from their clients.
PS: Mutual funds, hedge funds and pension plans are all run by asset
management companies.
Show ur Love!
51. What is SENSEX and NIFTY?
PS: Cross Question: What do you mean by Index?
52. What is NOSTRO and VOSTRO account?
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Ans. A NOSTRO account is maintained by an Indian bank in foreign countries. A
VOSTRO account is maintained by a foreign bank in India.
53. What is foreign exchange reserve?
Ans. Foreign exchange reserve (aka Forex reserves) is the foreign currency deposits
and bonds (only), that a country’s central bank or monetary authorities hold.
Sometimes in broader aspect, Forex reserve is also used to indicate foreign exchange,
gold, SDRs and IMF reserve positions.
54. What is Bancassurance ?
55. what is Bitcoin?
Ans. Bitcoin is a type of digital money. It’s decentralized peertopeer payment
network. In other words, it is powered by its users with no central authority.
56. What is a NonBanking Financial Company (NBFC)?
Ans. Nonbanking financial companies aka NBFCs are financial institutions that provide
banking services, but do not hold a banking license. These institutions can’t take
deposits from the public. They also can’t issue cheques drawn on themselves; as
they do not come under Payment and Settlement System. However, these institutions
performs all operations under the ambit of banking regulations.
PS: NBFCs are not insured by DICGC (Deposit Insurance and Credit Guarantee
Corporation)
57. What is PM Jan Dhan Yojna?
Ans. PMJDY is a scheme for financial inclusion launched by the PM Narendra Modi on
28 August 2014. The scheme was first announced on his first Independence Day
http://www.bankersambition.com/ibpspointerviewquestionsanswerspdf/ 15/49
03/12/2015 IBPS PO Interview Questions and Answers pdf
speech on 15 August 2014.
Highlights of the scheme:
1. Accounts will be zerobalance bank accounts with issuance of RuPay debit card. In
addition, an accidental insurance cover of Rs 1 lakh will be provided by HDFC Egro.
2. Those opening accounts by January 26, 2015 will be given additional life insurance
cover of Rs 30,000 by LIC.
3. After Six months of satisfactory operation of the account, holders can avail 5,000
overdraft from the bank.
4. Mobile banking for the poor would be available through National Unified USSD
Platform (NUUP)
PS: Cross question on the current status of the Jan Dhan Yojna can be asked
If you want to download the ibps po interview questions and answers pdf, you may do
so by clicking here. (link active now!)
Other good reads on the topic:
1. Mrunal’s Blog On Ibps Interview
2. Common Tips on Interview by JagranJosh
Some sources that we extensively referred:
1. Investopedia
2. Wikipedia
3. Arthapedia
4. Economictimes
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03/12/2015 IBPS PO Interview Questions and Answers pdf
That’s all for the ibps po interview questions and answers pdf.
If you want any other questions to be in the list that you strongly feel are important, do
tell in the comments. If you see any errors that might have inadvertently crept in… Well!
Do report that too in the comments
Wishing you all success in your endeavors ! All the best, Guys!
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About Latest Posts
Dushyant Shrivastava
Hi there,
I'm Dushyant Shrivastava, A Professional blogger from Hyderabad, currently in
Bangalore.
My niche is teaching stuff about IBPS and SBI competitive exams. I mostly talk
about preparation tutorials, and occasionally about some recent exam
notifications. You may visit my site at BankersAmbition.com to get a glimpse of
my writings.
http://www.bankersambition.com/ibpspointerviewquestionsanswerspdf/ 17/49
RITESH MEHRA
Join Our whatsappgroup(9211825282) for latest
updates regarding exam results and notification.
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1. Tell me something about yourself?
Generally this is the first question which is put up in front of the candidate appearing
in the interview. To answer this, the candidate must tell his name, place of residence and his
current work or educational degree along with a very brief note on his family-father, mother
and siblings. He/she can also tell about his father or mother’s occupation. Some key points to
note here are :-
He must know the meaning of his name and specific reference with his name if any. For
ex. A boy names ―Prashand‖ was asked about the geographical connection of his name i.e.
PrashantMahasagar or Pacific Ocean.
The answer should be precise and question like – if your father is a teacher then why do
you want to become a banker? Can come up from your answer to the first question. Be
prepared with the answers to these expected questions.
Because this is the first question so the candidate must give a short and effective answer.
You might be nervous at the beginning but remember to keep a smile on your face.
2. Where have you come from and what is famous in your city?
The candidate must tell about his place of living – city and state. If the board further
asks about any specifications, then name of the district etc. should be told. He/she must tell
about the famous things of his place. For ex- a candidate from Lucknow may tell about
Imambara, chicken clothes, ―tehzeeb‖ of Lucknow etc. The key things to deal this question
effectively are :-
The candidate must know about the local MLA and MP from his area. If any renowned
personality belongs to that are, you should be aware of the details.
He must have full knowledge about the place, its history, famous monuments, personalities,
rivers, at times even number of
railway stations in the city etc, also about the politics of that state – CM and ruling party
and all other nittygritties of his place.
For ex- A candidate from Ghazipur, U.P. was asked about cultivation of ―Poppy seeds‖ as
Ghazipur is famous for cultivation of Poppy seeds.
At times, questions about local politics are also put forward like a candidate, from Amethi
was asked about the electoral battle between Rahul Gandhi and Kumar Vishwas from
Amethi.
A good answer to such questions leaves a very positive impact on the board as it
demonstrates your awareness about the surroundings and the fact that you are well
prepared puts you ahead of others.
3. Why do you want to join the banking industry?
To answer this question, you can say something like – ―I want to join this industry
because it can provide me a stable careen with good growth prospects. IT is one of the fastest
growing sectors of the nation and provides great career opportunities.‖
There could be many other reasons for you wanting to join the bank industry for e.g.
it is an honest organization, good working conditions, chances to directly interact with public
etc. The choice of reason could be anything that suits you as a person.
This is a very commonly asked question and you must be prepared to answer it.
4. 9211825282
Please tell us about your strength and weaknesses?
Here, the answers vary from candidate to candidate. But the strength and weakness
should be such that they match up to or are in synchronization with the personality of the
candidate. For ex- If a candidate says that his strength is general awareness while in reality he
possesses least knowledge of current affairs – cross questioning can easily unveil him and
could actually land him in trouble. Some key things to answer this question effectively are :-
Try to put forward a strength which is useful in the banking sector. For ex- good
communication skills, adjustable etc. The strength should bring about a positive aspect of
your personality in front of the board.
This is a question from which you can actually turn the interview in your favour. For ex- If
you say something like ―I have won many awards in debate competitions so I would think
that good oratory skills are my strength.‖
This way I can inform the board about my previous achievements also and can get an
advantage over others.
They may ask how your quality/strength will be helpful to bank. Be prepared with an
answer.
Weakness should not be very negative like short temper, irregular etc.as they leave a bad
impression.
Remember, this question is the golden chance for you to turn the ball in your court. In the
answer you must introduce all your unique talent in front of the board. So that the
interview enters in your own comfort zone.
5. After doing B.Sc/B,tech/MBA/MA why do you want to choose banking? Why not
something related with your field of education?
You must give honest and sensible answers to such question. For ex- A MBA
candidate may say that there are hardly good jobs in MBA as now. Banking is a safe sector
providing great employment opportunities. In the answer, you must show your keen interest in
joining banking sector and it should not
look like you don’t have an option so you are choosing it.
You can also expect some questions from academics. A science stream student may be asked
about Newton’s Law etc. So, you must also prepare the subjects studied by you in the degree.
6. What are the basic documents a person requires to open an account?
The RBI has advised banks to follow the Know Your Customer (KYC) guidelines where some
personal information of the account holder is obtained by the bank. This information includes :
- photograph, proof of identity and proof of address. In 2013, AADHAR cards and MNREGA
cards are included in KYC papers. Without these documents a person can’t open his account.
Key points :-
The interviewer might ask whether you have a bank account or not.
It is preferable to have an account and to know about the process because it will only help
you if such questions come up.
7. Who is the governor of RBI?
As of today (March`14), you can answer this as, Mr. RaghuramGovindRajan is the
rd
23 governor of RBI. Before taking reins as RBI governor he was an officer on special duty in
RBI. He has also served as economic advisor in PMEAC. His tenure is of 3 years ending in
September 2016.
In IBPS interviews, you must have a quick read about the prominent personalities of
banking industry, especially governor and deputy governors of RBI.
9211825282
You must address the name of personalities by using Mr. or Madame in case of male and
female respectively.
Try to keep yourself updated about the recent happenings of at least the month prior to
interview.
th
7 Tell us something about the 27 or latest public sector bank in India.
th
Sir, the 27 public sector bank in India is BhartiyaMahilaBank.It was created by Finance
th th
Bill 2012. The first BMB was opened in Mumbai on 19 November 2013 on the 94
birth anniversary of Indira Gandhi. Ikdia is the third country in the world to have a bank
especially for women after Pakistan and Tanzania.
Tagline- "women empowerment economically".
Head- UshaAnanthaSubramanayam
The bank allows deposit from everyone, but lending will be focused for women.
This bank is very important because it is the latest and 27th PSB of India. So, try to know
every basic point about BMB.
Initial capital of Rs. 1000 crore.
Similarly, if there has been some other initiative in that year, you should be well aware of it.
11. What is a Non -banking Financial Company (NBFC)? Difference between NBFC and
banks?
NBFC is a company registered under the companies act, 1956 which is involved in the business
of tans, shares/stocks, etc. Non-banking financial companies are financial institutions that provide
banking services, but do not hold a banking license. These institutions are not allowed to take
deposits from the public. NBFCs do offer all sorts of banking services, such as loans and credit
facilities, retirement Manning, money markets, underwriting, and merger activities. The basic
difference between bank and NBFC is:-
They can't accept demand deposits.
They are not a part of the payment and settlement system and can't issue cheques drawn
on themselves
They are not registered in the banking act and don't have a banking license.
They don't have to maintain CRR, SLR or CASA like banks.
12. 9211825282
What is the difference between nationalized banks and private banks?
A nationalized bank is owned by the govt of that country and is also known as public sector
bank
whereas a private sector bank is owned by an independent individual or company.
Only under the above cases, bank can lend below base rate.
20. We hear regularly that all bank branches are turning CBS. What is CBS?
Sir, CBS stands for CORE banking solutions under which the branches of the banks are
interconnected with each other through intra net with a central database server. Now, with this
facility, a person having an account in a certain branch of the bank can operate from any other
branch of the same bank. He need not visit the same branch to operate his account. The CORE word
in CBS stands for Centralized Online Real time Exchange.
24. What is the difference between Micro finance and micro credit?
Micro credit is giving a small amount of loan to the customers whereas Micro Finance is a
wide term. It includes small loan + training on financial matters. In other words, Micro finance=
Microcredit
Financial Literacy.
• CRISIL has made an index to calculate financial inclusion named as "CRIS1L I NCLUSIX"
and in June 2013, there was 40% financial inclusion as per the index.
Q. 1. What is a bank?
Ans. Bank is a financial institute where we deposit the money. The bank accepts this money for
the purpose of lending and repays it on demand.
Q. 6. Under which act were the. State Bank of India and its subsidiaries nationalized?
Ans. The State Bank of India and its subsidiaries where nationalized under SBI Act, 1955.
9211825282
Q. 9. Which is the first bank that was incorporated at the initiative of World Bank and in
which year?
Ans. The Industrial Credit and Investment Corporation of India Limited °GIGO in the year
1955.
Q.10. How may development banks are there in India and name them?
Ans. There are six development banks are there in India. They are: - ICICI IDBI SIDBI - EXIM
BANK - NHB - NABARD
Q.11. In which year Indian Banks Association (IBA) was formed and initially with how
many members?
Ans. IBA was formed in 26 September, 1946 with 22 members.
Q.14. What is the minimum amount of money that should be remitted through RTGS?
Ans. We can remit Rs 2,00,000/- minimum through RTGS.
Q.17. How many types of electronic clearing service (ECS) are there?
Ans. There are two types of ECS used in banks. They are:-- ECS-credit - ECS-debit
Q.20. Which was the first Indian bank to get an ISO certification?
Ans. CANARA bank was first Indian bank that got an ISO certification.
Q. 24. According to Narasimham committee what is the minimum amount of money that is
statutorily required by the NBFC's for registration?
Ans. According to Narasimham committee NBFC's require Rs.25,00,000 for registration.
Q.25. Which committee had worked for the recapitalization of Regional Rural Banks (RRB's)?
Ans. K.C. CHAKARABARTY worked for the recapitalization of RRB's.
Q.26. The authorized capital of NABARD in 2013 was raised up to what limit?
Ans. In the year 2013 the authorized capital of NABARD raised up to 20000 corers.
Q.32. How many types of debit card do the banks provide to their customers in India?
Ans. The following are the types of debit cards provided by the banks in India are:-
VISA CARD
MAESTRO CARD 9211825282
MASTERCARD
RUPAY CARD
Q.35. How many type of deposits does Indian banking deal with?
Ans. The Indian banking industries deal with the following types of deposits:-
Term deposits
Demand deposits
Current deposits
Savings deposits
Q.45. Which system eliminates the physical movement of cheques and provides the efficient
method for cheque clearing?
Ans. "CHEQUES TRUNCATION SYSTEM" (CTS) is the system that eliminates the physical
movement of cheques and provides a secure and efficient method of cheque clearing.
Q.48. What are the advances that the banks grant to their customers for their financial
assistance?
Ans. There are three types of advances that bank grant to their customers for their financial
assistance:-
Cash credit
Overdraft
Discounting of bills
Q.16. How many types of Repos are available in International Market when classified with
regard to 9211825282
maturity of underline security, pricing, terms of repo etc.?
Ans. There are four types of repos are in International Market:
Buy-sell back Repo
Classic Repo
Bond lending/borrowing Repo
Tripartite Repo
Q. 17 What is Market Stabilization Scheme (MSS)?
Ans. In Market Stabilization Scheme large capital flow is absorbed through selling of short-dated
government securities and treasury bills.
Q.25 How many printing presses for printing notes are available in India and name the
places where they are located?
Ans. There are four printing presses are available in India for printing notes. They are located at:-
Dewas (Madhya Pradesh)
Nasik (Maharashtra)
Mysore (Karnataka)
Salboni (West Bengal)
Q. 26 Name the authority that mint coins in India and also name the places where the minting
operation is processed?
Ans. The GOVERNMENT OF INDIA has the authority of minting coins under the advisory of RBI.
The
minting of coins is operated in the following
cities:-
Mumbai Noida
Kolkata
Hyderabad
Q.28 Name the fund management scheme introduced by RBI which helps the banks in their
fund
management?
Ans. Two types of fund management schemes were introduced by the RBI which help the banks to
maintain their funds:-
Centralised fund management system (CFMS)
Transfer of funds across deposit account department (DAD)
Q.32 Name the rating system given by RBI for the banking sector?
Ans. The rating system given by RBI for banking sector is known as CAMELS. The significance
of
CAMELS is as follow - C - Capital adequacy ratio
A - Asset quality (level of NPA) M Management effectiveness
E - Earning (profitability) L Liquidity
S - System and control
Market repo
RBI repo (LAF)
Treasury bills
9211825282
Inter-bank participation certificate (1988)
CBLO (2003)
Q.6 Name the participants of CBLO?
Ans. Following are the participants of CBLO:-
Scheduled commercial banks
Co-operative banks
Primary dealers (PDs)
Select all-India financial institutions
Insurance companies
Mutual funds and other corporate
Q.9 Name the major institutions involved with the CREDIT market?
Ans. Following are the major institutions involves with the CREDIT market:-
Banks
Financial institutions
NBFCs
Q.11 on which day in the week does RBI conduct the auction to issue the treasury bills?
Ans. On every Wednesday RBI conducts auction to issue treasury bills.
Ans. CERTIFICATE OF DEPOSITS (CD) is a negotiable money market instrument and is issued
in the
form of USANCE promissory note.
Q.14 What do we call a market instrument which has features of equity as well as debenture?
Ans. The market instrument which has the feature of both equity and debenture is called "HYBRID
INSTRUMENT". 9211825282
Q.15 What are the various forms of derivative instruments?
Ans. Following are the forms of derivative instruments:-
Forward contract
Options
Swaps
Q.16 How many forms of SWAPS are there in derivatives, name them?
Ans. There are two forms of SWAPS in derivatives:
Interest rate swaps
Overnight index swaps
9211825282
Q.29 What do you mean by "Bull" as regarding capital market?
Ans. If a person is optimistic and believes that stock will go up, he or she is called a "BULL" and is
said to
have a bullish outlook.
Q.31 Categorize the NBFC based on the way they accept public deposits?
Ans. There are two types of NBFC based on their public deposits:-
NBFC- deposit taking (NBFC-D)
NBFC- non deposit taking (NBFC-ND}
Ans. It's an instrument containing an unconditional order signed by the maker directing a certain
person to
pay a certain sum of amount only to the bearer of that instrument.
of exchange are known as "Hundi". Then the seller sends the "Hundi" to the buyer for its
acceptance.
These bills of exchange are generally written in native language of that place and governed by
local usage
and practices. Generally four types of Hundi are
used.
The validity of the cheque can be reduced by the drawer, like valid for 3 months but the
maximum validity 9211825282
of any cheque is 6 months.
Current account can be opened with some initial amount decided by the bank. Here the bank
does not pay
any interest on their balance, in fact the bank charges the customer certain amount each
year as
Operational Charge. It also provides the facility of withdrawing excess of the balance of
deposit.
Ans. It's a norm for the identification of the "Non-performing asset" (NPA) starting 31 March
2014.
Interest or installment of principal remain overdue for more than ninety days in respect of
term loan.
The account remains out of order for the period of more than ninety days.
The bill remains overdue for the period of more than ninety days.
Any amount to be received is due for more than ninety days.
Ans. The process of converting illegal money into legal money is Money Laundering. According to
Section
3 of the Prevention of Money laundering Act
2002 as.
1. Placement stage:-lt is the first introduction of entry for funds derived for any criminal
activities.
2. Layering/Agitation stage: - The object of this stage is to prevent the tracing of illegal
proceed. It
creates a complex network of transactions which attempts to not reveal the link between the
initial entry
Q. 29 What is "BANKNET"?
Ans. It's a kind of payment network established by RBI. It was launched during 1991 in India. In
this
network the user can BANKNET from their premises through leased or dial up lines at the
local centers.
Here the messages of banking transactions are transferred in the form of codes for the
settlement of the
transaction and advice. It also provides access to SWIFT through its system.
Q. 30 What is "RBINET"?
Ans. It is a communication system running on BANKNET and RBI NET is a client running a
personal
computer called RBI NET. It can communicate with its server over the dedicated leased or
dial-up lines.
Q. 31 What is "I-net"?
Ans. I-net was opened in 1983. It is owned by the Department of Telecommunication which uses
Packet 9211825282
Switching Public Data Network (PSPDN). PSPDN is a kind of data sending technology. I-
net uses
telephone connections and satellites for communication which replaces the slow speed data
communication. This technology connects major metropolis and international networks.
Q. 32 What is "NICNET"?
Ans. MONET stands for National Informatic Centre Network, which was set up in 1975. It
promotes
information culture which is a government organization and work for government
organizations. It provides multiple facilities to finance, agriculture, industry, commerce by providing
various applications. Currency chest operations in banks are performed by NICNET.
Q. 33 What is "INFINET"?
Ans. The abbreviation for INFI NET is Indian Financial Network. It was developed by RBI
sponsored
organization which provides fast and secure intra —bank and inter-bank communication
system.
Q. 34 What is "SPNS"?
Ans. The full form of SPNS is Shared Payment Network System. It provides round-the-clock
banking
convenience to customer of any bank performing basic banking functions like cash
withdrawal, balance
enquiry etc. at any ATM belonging to any bank.
Q. 35 Which banking services can be used through Information Technology (IT)?
Ans. Following banking services can be achieved by using IT:
Faster remittance services
Home banking
Tele- banking
Cash management products
Banking online
Q. 4 What is "Stagflation"?
Ans. It is the situation in which inflation rises continuously even though there is recession in the
economy.
Q. 5 What is "Deflation"?
Ans. Deflation is the theory which deals with the general reduction in the price level of
particular goods.
Q. 7 According to KYC guidelines which are the three documents that are mandated by
RBI?
Ans. Following are the documents that are mandated by RBI in accordance to KYC guidelines:-
Photograph
Proof of identity
Proof of address
Q. 21What is "CCIL"?
Ans. Acronym for COIL is clearing corporation of India limited. It is the clearing agencies of
government
securities. It acts as centraJ counter party (CCP) for all transaction in government securities by
interposing
itself between two counterparties during settlement.
Q. 22 What is "Tier 1 Capital"?
Ans. Tier 1 capital is a core capital that includes equity capital and disclosed reserves.
Trust can terminate its liabilities in certain cases such borrower becoming ineligible.
· Lending institutions shall submit statements or information's as required by the trust.
Q. 38 What is "Reflation"?
Ans. Reflation is the act of simulating the economy by increasing the money supply or by reducing
taxes.
Q. 39 What is "Biflation"?
9211825282
Ans. Biflation is a state of economy where the process of inflation and deflation occurs
simultaneously.
Monetary policy
Fixed exchange rates
Gold standard
Wage and price control
Q. 42 What is "ALCO"?
Ans. Acronym for ALCO is "asset-liability management committee". It is a strategic decision
making body,
formulating and overseeing the function of asset liability and management (ALM) OF BANK.
Q. 1 What is budget?
Ans. The 'Budget System' in India was first introduced on 7th April 1860 by James Wilson, the
first Indian
Finance Member. The budget is the 'Statement' of the estimated receipts and expenditure of
Government
for that year. This 'Statement' is calledthe "Annual Financial Statement".
One copy of the budget is presented in RajyaSabha also. After few days the discussion starts
on the
presented Budget. Budget was discussed in two stages:
After receiving 'demands for grants' and detailed discussion by the different ministries the
budget is
processed.
Ans. It consists of capital receipts, payments, and incorporate transactions in the Public Account.
Q. 40 What is "CENVAT"?
Ans. This scheme reduces the cascading effect of indirect taxes on finished products.
Next » Banking interview — Areas emphasized upon by the panel and questions asked
Q. 13 What is "Hundi"?
Ans. Hundi is kind of "bill of exchange". In Hundi any seller sells his good under bill of exchange.
These bill
of exchange are known as "Hundi". Then the seller sends the 'Hundi" to the buyer for its
acceptance.
These bills of exchange are generally written in native language of that place and governed by
local usage
and practices. Generally four types of Hundi are
used
While opening this account the deposit per month is fixed. We can deposit the amount once in the
month on a fixed date and the amount is also fixed. The total amount with interest we can receive
after the
maturity. The rate of interest in recurring deposit
account is higher than the saving account. The
account can be opened by a person
individually as well as jointly with another.
3. Integration stage: - This process achieves the appearance of total legitimacy of funds
thereby it refers to the return of funds to the legitimate economy for later extraction.
RITESH MEHRA
Join Our whatsappgroup(9211825282) for latest
updates regarding exam results and notification.
If you are willing to clear Bank Exams within 3
months Do follow our hand made study material
which is free of cost.
no need to waste you money now
contact us
RiteshMehra Classes
South extension part 1
newdelhi- 110003
There could be many other reasons for you wanting to join the bank industry for e.g. it is an honest organization, good working
conditions, chances to directly interact with public etc. The choice of reason could be anything that suits you as a person.
This is a very commonly asked question and you must be prepared to answer it.
5. After doing B.Sc/B,tech/MBA/MA why do you want to choose banking? Why not something related
with you field of education?
You must give honest and sensible answers to such question. For ex:- A MBA candidate may say that there are hardly good jobs
in MBA as of now. Banking is a safe sector providing great employment opportunities. In the answer, you must show your keen
interest in joining banking sector and it should not look like you don’t have an option so you are choosing it.
You can also expect some questions from academics. A science stream student may be asked about about Newton’s Law etc. So,
you must also prepare the subjects studied by you in the degree.
Key points:-
In IBPS interviews, you must have a quick read about the prominent personalities of banking industry, especially
governor and deputy governors of RBI.
You must address the name of personalities by using Mr. or Madame in case of male and female respectively.
Try to keep yourself updated about the recent happenings of at least the month prior to interview.
8. Tell us something about the 27th or latest public sector bank in India
Sir, the 27th public sector bank in India is Bhartiya Mahila Bank. It was created by Finance Bill 2012. The first BMB was
opened in Mumbai on 19th November 2013 on the 94th birth anniversary of Indira Gandhi. India is the third country in the
world to have a bank especially for women after Pakistan and Tanzania.
Tagline- “women empowerment economically”.
Head- Usha Anantha Subramanayam
The bank allows deposit from everyone, but lending will be focused for women.
This bank is very important because it is the latest and 27th PSB of India. So, try to know every basic point about BMB.
Initial capital of Rs. 1000 crore.
Similarly, if there has been some other initiative in that year, you should be well aware of it.
10. What is a Non -banking Financial Company (NBFC)? Difference between NBFC and banks?
A NBFC is a company registered under the companies act, 1956 which is involved in the business of loans, shares/stocks, etc.
Non-banking financial companies are financial institutions that provide banking services, but do not hold a banking license.
These institutions are not allowed to take deposits from the public. NBFCs do offer all sorts of banking services, such as loans
and credit facilities, retirement planning, money markets, underwriting, and merger activities.
12. What is the difference between nationalized banks and private banks?
A nationalized bank is owned by the govt. of that country and is also known as public sector bank whereas a private sector
bank is owned by an independent individual or company.
Thus NPA is somehow not yielding any income to the lender either in the form of principal or interest payments. NPA is also
known as “bad debts”.
NPA is shown at the assets side of the balance sheet whereas deposits are shown at the liability side.
If there is any recent story or news regarding NPA, then revise it thoroughly. For ex:- Recently, United bank of India
was marred in loss due to its rising NPA. So was the case with Kotak Mahindra Bank.
20. We hear regularly that all bank branches are turning CBS. What is CBS?
Sir, CBS stands for CORE banking solutions under which the branches of the banks are interconnected with each other through
intra net with a central database server. Now, with this facility, a person having an account in a certain branch of the bank can
operate from any other branch of the same bank. He need not visit the same branch to operate his account. The CORE word in
CBS stands for Centralized Online Realtime Exchange.
24. What is the difference between Micro finance and micro credit?
Micro credit is giving a small amount of loan to the customers whereas Micro Finance is a wide term. It includes small loan +
training on financial matters. In other words, Micro finance= Microcredit + Financial Literacy.
26. What are the steps taken by banks to promote financial inclusion?
Publicity of banks so that more and more people open the accounts.
BSBDA so that poor people can also open their account.
People with agriculture land are being provided with Kisan Credit Card.
General Purpose Credit card provided to people with no agricultural land where maximum limit of withdrawal is
Rs.15,000 and rate of interest is 4%.
Ultra small banking and banking correspondents.
CRISIL has made an index to calculate financial inclusion named as “CRISIL INCLUSIX” and in June 2013, there was
40% financial inclusion as per the index.
Liquidity Adjustment Facility (LAF) introduced in 2000 has a provision that reverse repo rate will be 1% less than the Repo
rate.
He needs to prepare a full note about RBI, and types of banks, functions of RBI, and the latest monetary policy given by RBI etc.
and many other banking terms and facts, insurance facilities provided by banks, important bills like food security bill, RTI etc.
Both budgets are presented in Lok Sabha. The Railway Budget is presented by the ‘Minister of Railway’ and the General
Budget is presented by the ‘Finance Minister’. The Budget speech is represented in two parts:
PART A –“General Economic Survey” and
PART B –“taxation proposals”.
One copy of the budget is presented in Rajya Sabha also. After few days the discussion starts on the presented Budget.
After receiving ‘demands for grants’ and detailed discussion by the different ministries the budget is processed.
Q6. Under which act were the State Bank of India and its
subsidiaries nationalised?
Ans. The State Bank of India and its subsidiaries where nationalized
Q9. Which is the first bank that was incorporated at the initiative of World Bank and in which year?
Ans. The Industrial Credit and Investment Corporation of India Limited (ICICI) in the year 1955.
Q10. How may development banks are there in India and name them?
Ans. There are six development banks are there in India. They are:
ICICI
IDBI
SIDBI
EXIM BANK
NHB
NABARD
Q11. In which year Indian Banks Association (IBA) was formed and initially with how many members?
Ans. IBA was formed in 26 September, 1946 with 22 members.
Q14. What is the minimum amount of money that should be remitted through RTGS?
Ans. We can remit Rs 2,00,000/- minimum through RTGS.
Q16. Which was the first Indian bank to get an ISO certification?
Ans. CANARA bank was first Indian bank that got an ISO certification.
Q17. Name the financial institution built by Industrial Development Bank of India (IDBI)?
Ans. The financial institutions built by IDBI are:-
NATIONAL STOCK EXCHANGE OF INDIA (NSE)
THE NATIONAL SECURITIES DEPOSITORY SERVICE LIMITED (NSDL)
STOCK HOLDING CORPORATION OF INDIA (SHCIL)
Q18. According to Narasimham committee what is the minimum amount of money that is statutorily
required by the NBFC’s for registration?
Ans. According to Narasimham committee NBFC’s require Rs.25,00,000 for registration.
Q20. The authorized capital of NABARD in 2013 was raised up to what limit?
Ans. In the year 2013 the authorized capital of NABARD raised up to 20000 corers.
Q30. Which Act allows the bank and financial institutions to auction the properties when borrower
fails to repay the loans?
Ans. SARFAESI Act, 2002 allows the banks and financial institutions to auction the properties when borrowers fail to repay
their loans.
The acronym for SARFAESI is “Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest”.
1. Saving Account - Saving accounts are opened to encourage the people to save money and collect their savings. The saving
account holder is allowed to withdraw money from the account as and when required. The interest on Saving Bank
Accounts was fixed by RBI and it was fixed at 4.00% on daily balance basis. RBI has deregulated Saving Fund account
interest rates and now banks are free to decide the same within certain conditions imposed by RBI.
Features of Saving Accounts –
There is no restriction on the number and amount of deposits. However, in India, mandatory PAN (Permanent Account
Number) details are required to be furnished for doing cash transactions exceeding र50,000.
Withdrawals are allowed subject to certain restrictions.
A minimum amount has to be kept on saving account to keep it functioning.
2. Current Account - Current Accounts are basically meant for businessmen and are never used for the purpose of investment
or savings.
Features of Current Accounts –
The main objective of Current Account holders in opening these account is to enable them (mostly businessmen) to
conduct their business transactions smoothly.
There are no restrictions on the number of times deposit in cash / cheque can be made or the amount of such
deposits;
3. Recurring Desposit Account: Recurring Deposit is a special kind of Term Deposit offered by banks in India popularly
known as RD accounts which help people with regular incomes to deposit a fixed amount every month into their Recurring
Deposit account and earn interest at the rate applicable to Fixed Deposits.
Features of RD Accounts –
Recurring Deposit accounts are normally allowed for maturities ranging from 6 months to 120 months
These accounts can be opened in single or joint names. Nomination facility is also available.
Rate of Interest offered is similar to that in Fixed Deposits.
Interest is compounded on quarterly basis in recurring deposits.
4. Fixed Deposit Account (FD) - The account which is opened for a particular fixed period (time) by depositing particular
amount (money) is known as Fixed (Term) Deposit Account. The term 'fixed deposit' means that the deposit is fixed and is
repayable only after a specific period is over. Under fixed deposit account, money is deposited for a fixed period say six
months, one year, five years or even ten years. The money deposited in this account can not be withdrawn before the expiry of
period.
Features of FD Accounts –
The main purpose of fixed deposit account is to enable the individuals to earn a higher rate of interest on their
surplus funds (extra money).
The amount can be deposited only once. For further such deposits, separate accounts need to be opened.
Fixed Deposit Account may be opened for a minimum period of 7 days and maximum period of 10 years.
The minimum amount required to open a Fixed Deposit is Rs.1000.
Withdrawals are not allowed. However, in case of emergency, banks allow to close the fixed account prior to maturity
date. In such cases, the bank deducts 1% (deduction percentage many vary) from the interest payable as on that date.
5. About (BASIC SAVING BANK DEPOSIT ACCOUNT): Under the guidelines issued on August 10, 2012 by RBI: Any individual,
including poor or those from weaker section of the society, can open zero balance account in any bank. BSBDA guidelines are
applicable to "all scheduled commercial banks in India, including foreign banks having branches in India".
ii. The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial
Inclusion objectives.
6. ATMs: (Automated Teller Machine): The ATM debit cards, credit cards and prepaid cards (that permit cash withdrawal)
issued by banks can be used at ATMs for various transactions.
WHITE Label ATMs: ATMs which are owned and operated by non-banking companies are called White Label ATMs.
Note: RBI authorised four entities to operate as WLAs namely Tata Communications Payment Solutions, Prizm Payment
Services Pvt. Ltd, Muthoot Finance Limited and Vakrangee Ltd.
Personal Identification Number (PIN) : A Personal Identification Number is a secret numeric password shared between user
and a system that can be use to authenticate the user to the system.
MICR (Magnetic Ink Character Recognition): MICR stands for Magnetic Ink Character Recognition. MICR Code is a 9
numeric digit code which uniquely identifies a bank branch participating in the ECS Credit scheme. MICR code consists of 9
digits e.g 400229128
i. First 3 digits represent the city (400) ii. Next 3 digits represent the bank (229)
iii. Last 3 digits represent the branch (128)
Note: The MICR Code allotted to a bank branch is printed on the MICR band of cheque leaves issued by bank branches.
Cheque Truncation:
Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point with the presenting
bank en-route to the drawee bank branch.
In its place an electronic image of the cheque is transmitted to the drawee branch by the clearing house, along with relevant
information like data on the MICR band, date of presentation, presenting bank, etc.
Cheque Truncation speeds up the process of collection of cheques resulting in better service to customers, reduces the scope
for clearing-related frauds or loss of instruments in transit, lowers the cost of collection of cheques, and removes
reconciliation-related and logistics-related problems, thus benefitting the system as a whole.
Maximum deposit amount insured by the DICGC - Each depositor in a bank is insured upto a maximum of Rs.1,00,000
(Rupees One Lakh).
Credit Information Bureau (India) Limited: is India’s first Credit Information Company (CIC) founded in August 2000.
CIBIL collects and maintains records of an individual’s payments pertaining to loans and credit cards.
Headquarter – Mumbai
Coins in India
Coins: The Government of India has the sole right to mint coins. The designing and minting of coins in various
denominations is also the responsibility of the Government of India. Coins are minted at the four India Government Mints at
Mumbai, Alipore (Kolkata), Saifabad (Hyderabad), Cherlapally (Hyderabad) and NOIDA (UP).
Denominations: Coins in India are presently being issued in denominations of one rupee, two rupees, five rupees and ten
rupees. Note: Coins can be issued up to the denomination of Rs.1000 as per the Coinage Act, 1906.
Currency in India
Currency: Banknotes in India are currently being issued in the denomination of Rs 10, Rs 20, Rs 50, Rs 100, Rs500,
and Rs1000. These notes are called banknotes as they are issued by the Reserve Bank of India (Reserve Bank).
Note: The printing of notes in the denominations of Rs 1, Rs 2 and Rs 5 has been discontinued as these denominations have
been coinised.
Bank Notes in India
Contemporary Currency notes have 15 languages on the panel which appear on the reverse of the note.
Soiled Notes: Soiled notes are those which have become dirty and slightly cut. Notes which have numbers on two ends, i.e.
notes in the denomination of Rs.10 and above which are in two pieces, are also treated as soiled note. The cut in such notes,
should, however, not have passed through the number panels.
Mutilated Notes: Notes which are in pieces and/or of which the essential portions are missing can also be exchanged.
Essential portions in a currency note are name of issuing authority, guarantee, promise clause, signature, Ashoka Pillar
emblem/portrait of Mahatma Gandhi, water mark.
Imperfect banknotes: Imperfect banknote means any banknote, which is wholly or partially, obliterated, shrunk, washed,
altered or indecipherable but does not include a mutilated banknote.
Some Important Tips which you have to keep in your mind while going for Interview.
3. Attending the Interview: Go with a smile (not a grin) on your face, with confidence and determination to succeed in your
heart.
4. As You Enter:
i. Depending upon whether you are being interviewed by one person or a panel of interviewers, greet politely ‘Good
Morning’/Afternoon or Evening depending upon time of the day.
ii. If there are more than one person then address them as ‘Sirs/Madams’ and try to encompass them all in your greeting. If
there is only one lady in the panel, it is polite to greet her separately.
iii. Most probably you will be offered a seat. Do not sit down unless
you are asked to.
NBFCs lend and make investments and hence their activities are akin to that of
banks; however there are a few differences as given below:
NBFC cannot accept demand deposits;
NBFCs do not form part of the payment and settlement system and cannot
issue cheques drawn on itself;
deposit insurance facility of Deposit Insurance and Credit Guarantee
Corporation is not available to depositors of NBFCs, unlike in case of banks.
6. What is BSBDA?
Under the guidelines issued on August 10, 2012 by RBI: Any individual,
including poor or those from weaker section of the society, can open zero
balance account in any bank. BSBDA guidelines are applicable to "all scheduled
commercial banks in India, including foreign banks having branches in India".
All the accounts opened earlier as 'no-frills' account should be renamed as
BSBDA. Banks are required to convert the existing 'no-frills' accounts‟ into
'Basic Savings Bank Deposit Accounts'.
The 'Basic Savings Bank Deposit Account' should be considered as a normal
banking service available to all customers, through branches .
The aim of introducing 'Basic Savings Bank Deposit Account' is very much
part of the efforts of RBI for furthering Financial Inclusion objectives.
RuPay is the Indian domestic card payment network set up by National Payments
Corporation of India (NPCI) at the behest of banks in India. The RuPay project had
been conceived by Indian Banks Association (IBA) and had the approval of
Reserve Bank of India (RBI).
All Public Sector Undertakings (PSU) banks set to join RuPay system by the end
of year 2012. RuPay-based debit cards can be used by the consumers on the
Internet from September, 2012.
The government of India had launched India‟s first domestic payment card
network, RuPay, to compete with Visa Inc and Mastercard Inc.
19. What is the difference between Nationalized bank and Private Bank ?
A Nationalized bank is one that is owned by the government of the country. Since
the people decide who the government is, they are also referred to as public sector
banks. The government is responsible for the money deposited into the accounts of
these banks. Where as a private sector bank is one that is owned by an independent
individual or a company that is controlled by a few individuals. In short, the bank
is owned by someone else and they run the bank. The person owning/running the
bank is responsible for the money deposited into the accounts of these banks.
the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell
(RPCC) of Reserve Bank of India, and Agricultural Refinance and Development
Corporation (ARDC). It is one of the premiere agency to provide credit in rural
areas. NABARD is set up as an apex Development Bank with a mandate for
facilitating credit flow for promotion and development of agriculture, small-scale
industries, cottage and village industries, handicrafts and other rural crafts.
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