Interview Questions.

Top 100+ Banking Interview Questions And Answers


Top 100+ Banking Interview Questions And Answers

Question 1. What Is Rtgs And Neft?

Answer :

RTGS: Real Time Gross Settlement.

NEFT: National Electronic Fund Transfer.

These  are the 2 techniques via which budget may be transferred from one bank to every other bank.

Question 2. What Is The ‘cost Of Debt’?

Answer :

When any organisation borrows funds, from a monetary organization (financial institution) or other sources the hobby paid on that amount is referred to as ‘price of debt’.

Accounts and Finance for Managers Interview Questions
Question three. Types Of Accounts In Banks?

Answer :

Saving bank account [SB a/c]: The important motive of SB a/c is to encourage small financial savings from the general public. Interest paid on SB a/c is 3 percentage. Any character can open SB a/c. An Indian living at overseas can open a NRI a/c. NRI represents non-resident Indians.

Current account: It’s a going for walks and active account. No hobby is paid on modern a/c.

Current money owed may be opened on firm names. Even people also can open present day a/cs. But on company names you can't open SB a/c.

Fixed Deposit account: Amount is kept for a set length. Higher rate of interest could be paid in this a/c.

Recurring deposit [RD a/c]: A constant amount can be deposited in monthly installments.

Interest price is equal as fixed deposits.

Question 4. What Is ‘top Rate’?

Answer :

Basically, ‘top price’ is the price of hobby this is determined by countries (U.S.A) biggest banks for his or her favored customers, having an awesome credit score rating. Much ‘variable’ hobby relies upon on the ‘top costs’. For example, the ‘APR’ (Annual Percentage Rate) on a credit score card is 10% plus high fee, and if the high fee is 3%, the present day ‘APR’ on that credit card could be thirteen%.

Accounts and Finance for Managers Tutorial
Question 5. What Are Industrial Banks?

Answer :

The essential reason of business banks is to offer huge loans to large scale industries.

Examples: IDBI bank, Industrial bank of India and many others.

Modern Banking Interview Questions
Question 6. What’s The Treasury Stock Method?

Answer :

The treasury stock approach is used to calculate the net growth in stocks extremely good if in-the-money alternatives and warrants have been to be exercised.

Question 7. How Do You Boost Returns In An Lbo?

Answer :

The key levers are:

a decrease buy rate, a higher go out charge (while the organization is offered on), increased leverage. Improving the manner the organisation operations, or getting reasonably-priced financing.

The Mystery of Banking Tutorial Banking Supervision Interview Questions
Question 8. Why Should A Company Prefer Equity Finance To Debt Finance?

Answer :

Equity financing is less risky (you won’t need to pay it again). You’ll have more coins on hand. You gained’t ought to channel earnings into mortgage compensation. Your fairness buyers will have a long run view. Your business enterprise could have extra credibility. And you would possibly get to faucet your buyers’ community to help you increase the enterprise.

Question 9. What Is Accretion And Dilution?

Answer :

Accretion is asset boom thru addition or enlargement. Accretion can arise via a employer’s internal development or by way of way of mergers and acquisitions. Dilution is a discount in income per proportion of stock that occurs while additional stocks are issued or the inventory changes into convertible securities.

RMAN (Recovery Manager) Interview Questions
Question 10. Define Capm?

Answer :

CAPM is the capital asset pricing model, and it is a model designed to discover the expected go back on an investment and therefore an appropriate cut price fee for a agency’s coins flows. It presents the desired charge of return given the riskiness of the asset.

Modern Banking Tutorial
Question eleven. Name A Few Poverty Eradication Schemes Of Govt. Of India?

Answer :

Food Security bill, MNREGA, Sarva Shiksha Abhiyan, Antyodaya Yojana, JNNURM, Swavalamban Yojana, Nirmal Gram Yojana, Rajiv Awas Yojana, Indira Gandhi Pension plan and many others.

Bank Clerk Interview Questions
Question 12. What Is Capital Adequacy Ratio? What Is Demat Account?

Answer :

CAR is the share of capital to the banks’ risk. DEMAT money owed are those in which stocks, securities and coverage rules are kept in digital shape.

Accounts and Finance for Managers Interview Questions
Question 13. What Is Inflation And Deflation?

Answer :

Inflation: is the increase within the fee of goods and services because of greater call for and less supply. In inflation, there's more liquidity in market which needs to be managed to reduce the shopping electricity of customers.

Deflation: is the lower in expenses of goods and offerings due to more supply and really much less call for. In deflation, there's lack of liquidity in marketplace which results in very weak shopping power of people.

Question 14. What Is The Cad? What Is Fiscal Deficit?

Answer :

CAD or current account deficit is the difference between the imports and exports of a country in one monetary 12 months whereas financial deficit is the difference among overall sales and expenditure of a country.

Question 15. What Is The Difference Between Fii And Fdi?

Answer :

FDI or foreign direct investment is an investment that a figure agency makes in another country. FII or Foreign Institutional Investor is an funding made via an investor in the markets of a overseas state. FII can enter the stock marketplace without problems and also withdraw from it without difficulty. But FDI can not input and exit that without difficulty as FDI only objectives a selected zone.

Banking Operations Interview Questions
Question 16. What Is Banking Ombudsman Scheme?

Answer :

 The banking ombudsman scheme is a scheme to listen to patron’s grievances and lawsuits concerning certain offerings provided by way of the bank. It turned into brought under the Section 35 A of banking law act, 1949 via RBI with effect from 1995 which changed into later amended and have become the banking ombudsman scheme, 2006.

Customer can enchantment against the selection of ombudsman to deputy governor of RBI. He is the highest authority of enchantment. All banks in India are covered underneath the scheme.

Question 17. Tell Us Something About Nabard And Its Functions?

Answer :

NABARD became hooked up by using an act of Parliament on 12 July 1976 as National Bank for Agricultural and Rural Development. It is the apex financial institution to offer rural credit score and display the RRBs.

The essential capabilities of NABARD are:-

Provide refinance to RRBs and different banks in rural regions for lending.
Acts as a subsidiary for RRBs and co-operative banks.
Assistant Manager Interview Questions
Question 18. What Is Brown Label Atm?

Answer :

It refers back to the ATMs wherein funding, installation and preservation is through a personal operator however the license and branding is by means of a commercial financial institution.

Modern Banking Interview Questions
Question 19. What Is White Label Atm?

Answer :

It refers to ATMs owned by company or personal operators looking for to earn a fee via banks for transactions done by using their customers.

For ex:- INDICASH with the aid of TATA group.

Question 20. What Is Term Repo?

Answer :

Under time period repo, RBI lends to banks thru auction of finances. The minimal hobby charged has to be above the repo fee and there is no limit for optimum hobby fee due to the fact auction is made at the fee of hobby.

Investment Banking Interview Questions
Question 21. What Is Marginal Standing Facility (msf)?

Answer :

In MSF, banks borrow cash from RBI for upto 24 hours. MSF is continually 1% above the repo charge and banks can draw handiest upto 25 in their NDTL from RBI.

Question 22. What Is Statutory Liquidity Ratio (slr)?

Answer :

SLR is the quantity of NDTL which a financial institution needs to hold inside the form of cash, gold or govt. Securities before presenting credit score to its clients. Through SLR, RBI makes sure that bank continually have a reserve quantity out in their deposits to fulfill any destiny contingencies

Question 23. What Is Cash Reserve Ratio (crr)?

Answer :

CRR is the part of Net Demand and Time Liabilities (NDTL) or coins of the financial institution deposited with the RBI. A higher CRR makes loans steeply-priced as liquidity is managed by way of RBI. NDTL is the deposits of the customers with the bank.

Deputy General Manager(DGM) Interview Questions
Question 24. What Is Bank Rate?

Answer :

It is same as repo price but here the term is for greater than 90 days.

Banking Supervision Interview Questions
Question 25. What Is Repo Rate And Reverse Repo Rate?

Answer :

Repo fee is the rate :at which banks borrow from RBI at some point of scarcity of funds. This is a short time period loan supplied for upto ninety days via promoting securities to RBI and receiving cash in lieu of it.

Reverse repo charge :is the charge at which banks deposit their extra liquidity with the RBI. In other phrases, the charge at which RBI borrows from banks via promoting securities that allows you to manage extra liquidity within the market is reverse repo rate.

Question 26. What Are The Steps Taken By Banks To Promote Financial Inclusion?

Answer :

Publicity of banks so that increasingly humans open the debts.
BSBDA so that bad human beings also can open their account.
People with agriculture land are being provided with Kisan Credit Card.
General Purpose Credit card furnished to human beings with out a agricultural land in which most restrict of withdrawal is Rs.15,000 and charge of hobby 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 forty% monetary inclusion as in line with the index.

Question 27. What Is Financial Inclusion?

Answer :

Financial inclusion is the availability of banking services at a low-priced cost so that you can consist of the weaker phase of the society in the banking device.

RMAN (Recovery Manager) Interview Questions
Question 28. What Is The Difference Between Micro Finance And Micro Credit?

Answer :

Micro credit is giving a small quantity of loan to the customers while MicroFinance is a wide time period. It consists of small mortgage + schooling on economic subjects. In other phrases, Microfinance= Microcredit + Financial Literacy.

Question 29. What Is Priority Sector Credit?

Answer :

All Indian banks and foreign banks (which have greater than 20 branches in India) are required provide 40% in their credit to priority region out of which 18% is for agriculture. In case of Regional Rural Banks, 60% credit is to receive to priority sector.

Question 30. What Are The Components Of The Monetary Policy Of Rbi?

Answer :

The additives of monetary coverage include CRR, Repo charge, reverse repo price, SLR, MSF and Bank Rate.

Question 31. What Is Para Banking?

Answer :

Para Banking consists of all the offerings supplied by banks aside from everyday banking.

For example:  Debit playing cards, Credit playing cards, Life Insurance products, Cash Management offerings and so forth.

Question 32. We Hear Regularly That All Bank Branches Are Turning Cbs. What Is Cbs?

Answer :

CBS stands for CORE banking solutions below which the branches of the banks are interconnected with every other through intranet with a central database server. The CORE phrase in CBS stands for Centralized Online Realtime Exchange.

Question 33. In The Changing Banking Scenario, What Are The Most Important Needs Of The Banking Industry?

Answer :

We are living in a virtual age, wherein normal technological innovations our style of dwelling, doing the enterprise and even the way we do a commercial transaction. The banks will ought to catch up and provide (a) Multi Channel Optimization (b) Digital Distribution and most significantly (c) Effective Sales Efforts.

Bank Clerk Interview Questions
Question 34. What Is The Meaning Of “base Rate”?

Answer :

Base Rate is the minimum price of interest which a bank has to rate from its clients and a bank can’t sanction loan on a fee beneath the bottom fee. Banks may additionally pick any benchmark to decide on the bottom price.

The exceptions of base rate are:-

Agriculture loans
subsidized schemes
Staff loans
Only underneath the above instances, financial institution can lend under base fee.
Only below the above instances, financial institution can lend underneath base charge.
Question 35. Please Discuss Your Views About The Changes In Banking Scenario?

Answer :

Banking zone has efficiently been including new products and innovative services to its basket of merchandise being offered to retail consumer and institutional clients. I think the banking area will maintain its goal to accelerate the increase. Secondly every bank would love to optimize its charges of marketing and distribution so as to preserve its overheads low without affecting its reach or high-quality of offerings.

With regards to modifications, I sense that there might be advertising and marketing method which could be “socially engaging”. The leading banks might adopt “Intelligent Multichannel” technique over their brick and mortar department banking

Question 36. Tell Us Something About Bsbda.?

Answer :

BSBDA stands for Basic Savings Bank deposit account. BSBDA is the brand new call for “no-frill accounts” underneath which each person can open a bank account with even 0 stability in it or “0 stability account”. This BSBDA is aimed at providing banking facilities to weaker segment of the society and improve economic inclusion.

Banking Operations Interview Questions
Question 37. What Are Cooperative Banks?

Answer :

The foremost motive of cooperative banks is to co-function small scale industries, and to provide small loans.

Example: karimnagar dist co-op bank etc.

Question 38. What Are The Parts Of Banks’ Capital?

Answer :

Bank has following components of capital:-

Tier 1 capital:  Paid up capital (middle capital) + Reserves (proprietors or promoters’ fund)

Tier 2 capital:  Secondary Capital (borrowed budget) + wellknown loss reserves + subordinated time period debts + undisclosed reserves (can’t be maintained in India)

Tier 3 capital:  Same as tier 2 capital however with a higher quantity if you want to face the marketplace dangers of the bank.

Question 39. What Is Rbi [reserve Bank Of India], When It Is Established And What Are Its Functions?

Answer :

RBI hooked up in 1935, its head office in Mumbai. Present Governor of RBI “ D. SubbaRao”.

Its functions:

Issues foreign money notes
Acts as bankers bank
Maintains foreign exchange reserves
Maintains CRR and SLR
RBI is also called as “bankers bank”, due to the fact all banks may have a/c’s with RBI. It affords finances to all banks consequently it's far known as as BANKERS BANK.

Question 40. What Is The Difference Between Cheque And Demand Draft?

Answer :

Cheque is a negotiable instrument that's paid to the bearer but a demand draft is a negotiable tool continually payable on order.

Assistant Manager Interview Questions
Question forty one. What Is Rrb’s (nearby Rural Banks)?

Answer :

Main motive of RRBs is to enhance banking habit in rural areas and save formers from money lenders.

RRBs works under supervision of NABARD (National Bank for Agriculture and Rural Development).

NABARD head office is at MUMBAI.

Example of RRB’S: Pragathi grameena bank, Rayalaseema grameena financial institution and many others.

Every grameena financial institution is soponsered via a nationalised financial institution.

Example: Pragathi grameena bank is subsidized by means of “Canara financial institution”.

Share capital in RRB’s: Central authorities: 50%

Sponsored financial institution: 35%

State government: 15%

Question 42. What Do You Mean By Term “casa” Related To Bank?

Answer :

CASA stands for Current Account Savings Account. The CASA ratio shows how an awful lot deposit a bank has in the shape of current and saving account deposits inside the general deposit. A higher CASA ratio means higher running efficiency of the financial institution due to the fact on present day account there's no hobby payable whereas on savings account a tiny three.5% interest is payable through the bank. CASA ratio shows how an awful lot of the deposit of the financial institution comes from the contemporary and financial savings deposit.

Investment Banking Interview Questions
Question forty three. What Are Foreign Banks?

Answer :

Banks which are overseas originated [based] are known as overseas banks

Example: Citi bank, YES financial institution etc.

Question 44. What Is A Private Bank?

Answer :

Banks which might be owned and run through individuals are known as private banks.

Example: karnataka bank, karur vysya bank, lakshmi vilas financial institution and many others.

Question 45. What Are The Various Risks That Banks Face?

Answer :

There are specially 3 styles of dangers confronted with the aid of banks:-

Credit Risk:  mortgage or NPA.

Market Risk:  Money invested in the market.

Operational hazard:  Day-to-Day running dangers.

Question 46. When Banks Are Nationalized?

Answer :

In 1969 : 14 banks have been nationalized.

In 1980: 6 banks were nationalized.

Question 47. What Are The Non Performing Assets Of A Company?

Answer :

A NPA is an obligation payable to the financial institution which has no longer been made or the interest and major amount has not been paid on the due time. NPA is the loan or credit score supplied with the aid of the financial institution to its clients which couldn't be recovered in due time. NPA is likewise referred to as “awful money owed”.

Question forty eight. What Is A Nationalized Bank?

Answer :

Banks which can be owned and run by authorities of India are known as as nationalized banks.

Example: Canara bank, syndicate financial institution, Vijaya bank, etc..,

There are general 20 nationalized banks.

State financial institution of India has were given 7 subsidiaries they may be State financial institution of Hyderabad, State financial institution of Mysore, State bank of Travancore, State financial institution of Indore, State financial institution of Saurashtra, State financial institution of Bikaner, kingdom financial institution of Jaipur.

Question forty nine. What Is The Difference Between Nationalized Banks And Private Banks?

Answer :

A nationalized bank is owned by means of the govt. Of that united states and is likewise known as Public Sector Bank while a non-public zone financial institution is owned through an impartial person or organisation.

Question 50. Types Of Banks?

Answer :

Nationalized banks
Private Banks
Foreign banks
Regional rural banks
Co-operative banks
Industrial banks and so on.
Question fifty one. What Is A Non -banking Financial Company (nbfc)?

Answer :

A NBFC is a organisation registered underneath the corporations act, 1956 that's involved within the commercial enterprise of loans, stocks/shares, and so forth. Non-banking monetary agencies are monetary institutions that offer banking offerings, however do no longer keep a banking license.

These establishments are not allowed to take deposits from the public. NBFCs do offer all forms of banking services, which includes loans and credit score facilities, retirement planning, cash markets, underwriting, and merger sports.

Question fifty two. What Is Bank?

Answer :

Bank is monetary organization which accepts deposits from the public for the reason of lending.