importent banking

7/30/2019 Importent Banking

1/9

Common Questions for Interview

There cannot be clear cut strategy for the interviews as it all depends on how the interview

board is and what they have in their mind on the day. But having said that, it is always wise

to prepare well for your interviews, as smart preparation can always help to get through

this final hurdle. Although board can throw any question on you but with a little

brainstorming and application we can always find out some of the questions which are very

commonly asked in the interviews. Candidates should always prepare structured answers

of such questions so that they would not find any difficulty at the time of interview. Also

keep in mind that interview is a test of your communication skills so remain confident and

speak well during interviews, mock interview can help a lot, so practice a lot among your

friends and family members.

Just bear in mind that those 10-15 minutes can change your life so donthave any kind of

apprehensions and just be normal. Always talk positive and dontever give impression of

negativity (even if you are not a positive person). Communicate as much as you can on

relevant topics, a few days before your interview, it will not only boost your confidence but

also help you to have command over the language. In banking interviews apart from the

common questions and answers which I am providing you as under, question may also be

from your background, qualifications, current affairs, banking and financial terms etc. So

try to cover all such areas.

Tell me about yourself:

This is one of the most common but very important asked questions in interviews.

Therefore you need to have a short statement prepared in your mind. Try to cover a brief

about you which may include your background, qualifications, experience (if any), your

family and your career objective which may include that why you are looking for entering

into this sector. Practice this question among your friends to master over it. Talk about

things you have done and jobs you have held that relate to the position you are

interviewing for. Start with the item farthest back and work up to the present.


2/9

Why do you want to enter banking?

You need to talk about Banking. Your answer can have following bulleted points.

Banking is a fast changing environment and with the advent of new technologies andproducts scope for learning is much more now.

Retail banking is now very competitive from telephone banking, retailers and etc Banking

is thus now largely sales driven.

You can talk that banking offers a wide range of career opportunities for graduates not

just in branch banking but also in financial services, consultancy and corporate banking.

What significant trends do you see in the future in Banking Industry?

This is your chance to shine. You will be fully familiar with the economic situation and

development in the banking industry to tackle such questions. Development which have

recently taken in the banking industry, monetary policy, how the industry has evolved in

last few years and what is the future alike etc. are the areas which you should prepare.

What do you know about this organization?

This question is one reason to do some research on the organization before the interview.

Find out about the performance of the bank in which you are appearing for the interview.

What are the strong and weak issues of the bank and how they are performing on financial

parameters in the industry? Who are the major competitors and what action bank should

take to tackle competition.

Explain how you would be an asset to this organization or why should we select youfor this position?

This is another very good question which will give you an opportunity to impress the

board. It gives you a chance to highlight your best points as they relate to the position being

discussed. Talk about your strong points, qualifications, analytical skills etc. to highlight


3/9

that how can you be an asset to the bank. Please bear in mind that you have already cleared

the hurdle of the written part so dontever think that you cannot be an asset. The bank has

already tested your analytical abilities and they are now just looking for how you respond

to such question.

What is your greatest strength?

Numerous answers are good, just stay positive. A few good examples: Your ability to

prioritize, Your problem-solving skills, Your ability to work under pressure, Your ability to

focus on projects, Your professional expertise, Your leadership skills, Your positive attitude

etc.

Do you think you are overqualified for this position?

Regardless of your qualifications, state that you are very well qualified for the position.

Demand Deposit A Demand deposit is the one which can be withdrawn at any time,

without any notice or penalty; e.g. money deposited in a checking account or savings

account in a bank.

Time DepositTime deposit is a money deposit at a banking institution that cannot be

withdrawn for a certain "term" or period of time. When the term is over it can be

withdrawn or it can be held for another term.

Fixed Deposits FDs are the deposits that are repayable on fixed maturity date along with

the principal and agreed interest rate for the period. Banks pay higher interest rates on FDs

than the savings bank account.

Recurring Deposits These are also called cumulative deposits and in recurring deposit

accounts, a certain amounts of savings are required to be compulsorily deposited at specific

intervals for a specified period.


4/9

Savings Account Savings account is an account generally maintained by retail customers

that deposit money (i.e. their savings) and can withdraw them whenever they need. Funds

in these accounts are subjected to low rates of interest.

Current Accounts These accounts are maintained by the corporate clients that may be

operated any number of times in a day. There is a maintenance charge for the current

accounts for which the holders enjoy facilities of easy handling, overdraft facility etc.

FCNR Accounts Foreign Currency Non-Resident accounts are the ones that are

maintained by the NRIs in foreign currencies like USD, DM, and GBP etc. The account is a

term deposit with interest rates linked to the international rates of interest of the

respective currencies.

NRE Accounts Non-Resident External accounts are the ones in which NRIs remit money

in any permitted foreign currency and the remittance is converted to Indian rupees for

credit to NRE accounts. The accounts can be in the form of current, saving, FDs, recurring

deposits. The interest rates and other terms of these accounts are as per the RBI directives.

Cheque Book- A small, bound booklet of cheques. A cheque is a piece of paper produced

by your bank with your account number, sort-code and cheque number printed on it. The

account number distinguishes your account from other accounts; the sort-code is yourbank's special code which distinguishes it from any other bank.

**Knowing basic banking terms not only gives you an edge over other candidates but also

shows your interest level for the job. So my suggestion would be that you through all the

banking terms thoroughly.

Cheque Clearing - This is the process of getting the money from the cheque-writer's

account into the cheque receiver's account.

Clearing Bank- This is a bank that can clear funds between banks. For general purposes,

this is any institution which we know of as a bank or as a provider of banking services.

Bounced Cheque - when the bank has not enough funds in the relevant account or the

account holder requests that the cheque is bounced (under exceptional circumstances)


5/9

then the bank will return the cheque to the account holder. The beneficiary of the cheque

will have not been paid. This normally incurs a fee from the bank.

Credit Rating - This is the rating which an individual (or company) gets from the credit

industry. This is obtained by the individual's credit history, the details of which are

available from specialist organisations like CRISIL in India.

Credit-Worthiness - This is the judgement of an organization which is assessing whether

or not to take a particular individual on as a customer. An individual might be considered

credit-worthy by one organisation but not by another. Much depends on whether an

organization is involved with high risk customers or not.

Interest- The amount paid or charged on money over time. If you borrow money interest

will be charged on the loan. If you invest money, interest will be paid (where appropriate to

the investment).

Overdraft- This is when a person has a minus figure in their account. It can be authorized

(agreed to in advance or retrospect) or unauthorized (where the bank has not agreed to the

overdraft either because the account holder represents too great a risk to lend to in this

way or because the account holder has not asked for an overdraft facility).

Payee - The person who receives a payment. This often applies to cheques. If you receive a

cheque you are the payee and the person or company who wrote the cheque is the payer.

Payer - The person who makes a payment. This often applies to cheques. If you write a

cheque you are the payer and the recipient of the cheque is the payee.

Security for Loans - Where large loans are required the lending institution often needs to

have a guarantee that the loan will be paid back. This takes the form of a large item of

capital outlay (typically a house) which is owned or partly owned and the amount owned is

at least equivalent to the loan required.

Internet Banking - Online banking (or Internet banking) allows customers to conduct

financial transactions on a secure website operated by the bank.


6/9

Credit Card - A credit card is one of the systems of payments named after the small plastic

card issued to users of the system. It is a card entitling its holder to buy goods and services

based on the holder's promise to pay for these goods and services.

Debit Card Debit card allows for direct withdrawal of funds from customers bank

accounts. The spending limit is determined by the available balance in the account.

Loan - A loan is a type of debt. In a loan, the borrower initially receives or borrows an

amount of money, called the principal, from the lender, and is obligated to pay back or

repay an equal amount of money to the lender at a later time. There are different kinds of

loan such as the house loan, auto loan etc.

Bank Rate - This is the rate at which central bank (RBI) lends money to other banks or

financial institutions. If the bank rate goes up, long-term interest rates also tend to move

up, and vice-versa.

CRR - CRR means Cash Reserve Ratio. Banks in India are required to hold a certain

proportion of their deposits in the form of cash with Reserve Bank of India (RBI). This

minimum ratio is stipulated by the RBI and is known as the CRR or Cash Reserve

Ratio. Thus, When a banks deposits increase by Rs100, and if the cash reserve ratio is 9%,

the banks will have to hold additional Rs 9 with RBI and Bank will be able to use only Rs 91for investments and lending / credit purpose. Therefore, higher the ratio (i.e. CRR), the

lower is the amount that banks will be able to use for lending and investment. This power

of RBI to reduce the lendable amount by increasing the CRR makes it an instrument in the

hands of a central bank through which it can control the amount that banks lend. Thus, it is

a tool used by RBI to control liquidity in the banking system.

SLR - SLR stands for Statutory Liquidity Ratio. This term is used by bankers and

indicates the minimum percentage of deposits that the bank has to maintain in form of

gold, cash or other approved securities. Thus, we can say that it is ratio of cash and some

other approved to liabilities (deposits). It regulates the credit growth in India.

ATM - An automated teller machine (ATM) is a computerised telecommunications device

that provides the clients with access to financial transactions in a public space without the


7/9

need for a cashier, human clerk or bank teller. On most modern ATMs, the customer is

identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card

with a chip, that contains a unique card number and some security information such as an

expiration date or CVV. Authentication is provided by the customer entering a personal

identification number (PIN)

Balance of Paymentis the summation of imports and exports made between one

countries and the other countries that it trades with.

Balance of trade: The difference in value over a period of time between a country's

imports and exports.

Base year: In the construction of an index, the year from which the weights assigned to the

different components of the index is drawn. It is conventional to set the value of an index inits base year equal to 100.

Bill of exchange: A written, dated, and signed three-party instrument containing an

unconditional order by a drawer that directs a drawee to pay a definite sum of money to a

payee on demand or at a specified future date. Also known as a draft. It is the most

commonly used financial instrument in international trade.

Bretton Woods: An international monetary system operating from 1946-1973. The value

of the dollar was fixed in terms of gold, and every other country held its currency at a fixed

exchange rate against the dollar; when trade deficits occurred, the central bank of the

deficit country financed the deficit with its reserves of international currencies. The

Bretton Woods system collapsed in 1971 when the US abandoned the gold standard.

Call money: Price paid by an investor for a call option. There is no fixed rate for call

money. It depends on the type of stock, its performance prior to the purchase of the call

option, and the period of the contract. It is an interest bearing band deposits that can be

withdrawn on 24 hours notice.

Capital account; Part of a nation's balance of payments that includes purchases and sales

of assets, such as stocks, bonds, and land. A nation has a capital account surplus when

receipts from asset sales exceed payments for the country's purchases of foreign assets.

The sum of the capital and current accounts is the overall balance of payments.


8/9

Current account: Part of a nation's balance of payments which includes the value of all

goods and services imported and exported, as well as the payment and receipt of dividends

and interest. A nation has a current account surplus if exports exceed imports plus net

transfers to foreigners. The sum of the current and capital accounts is the overall balance of

payments.

Currency appreciation: An increase in the value of one currency relative to another

currency. Appreciation occurs when, because of a change in exchange rates; a unit of one

currency buys more units of another currency. Opposite is the case with currency

depreciation.

Fiscal deficitis the gap between the government's total spending and the sum of its

revenue receipts and non-debt capital receipts. The fiscal deficit represents the total

amount of borrowed funds required by the government to completely meet its expenditure

Foreign exchange reserves: The stock of liquid assets denominated in foreign currencies

held by a government's monetary authorities (typically, the finance ministry or central

bank). Reserves enable the monetary authorities to intervene in foreign exchange markets

to affect the exchange value of their domestic currency in the market. Reserves are invested

in low-risk and liquid assets, often in foreign government securities.

Gross domestic product (GDP): Gross Domestic Product: The total of goods and services

produced by a nation over a given period, usually 1 year. Gross Domestic Product measures

the total output from all the resources located in a country, wherever the owners of the

resources live.

Gross national product (GNP) is the value of all final goods and services produced within

a nation in a given year, plus income earned by its citizens abroad, minus income earned by

foreigners from domestic production. The Fact book, following current practice, uses GDP

rather than GNP to measure national production. However, the user must realize that in

certain countries net remittances from citizens working abroad may be important tonational well being. GNP equals GDP plus net property income from abroad.

Inflation: In economics, inflation is a rise in the general level of pricesof goods and

services in an economy over a period of time. When the price level rises, each unit of

currency buys fewer goods and services; consequently, inflation is also erosion in
http://en.wikipedia.org/wiki/Price_levelhttp://en.wikipedia.org/wiki/Price_levelhttp://en.wikipedia.org/wiki/Price_level


9/9

thepurchasing powerof money a loss of real value in the internal medium of exchange and

unit of account in the economy.

International Monetary Fund (IMF) An autonomous international financial institution

that originated in the Bretton Woods Conference of 1944. Its main purpose is to regulate

the international monetary exchange system, which also stems from that conference but

has since been modified. In particular, one of the central tasks of the IMF is to control

fluctuations in exchange rates of world currencies in a bid to alleviate severe balance of

payments problems.

Monetary policy: The regulation of the money supply and interest rates by a central bank

in order to control inflation and stabilize currency. If the economy is heating up, the central

bank (such as RBI in India) can withdraw money from the banking system, raise the

reserve requirement or raise the discount rate to make it cool down. If growth is slowing, it

can reverse the process - increase the money supply, lower the reserve requirement and

decrease the discount rate. The monetary policy influences interest rates and money

supply.

Subsidy: A payment by the government to producers or distributors in an industry to

prevent the decline of that industry (e.g., as a result of continuous unprofitable operations)

or an increase in the prices of its products or simply to encourage it to hire more labor (as

in the case of a wage subsidy). Examples are export subsidies to encourage the sale of

exports; subsidies on some foodstuffs to keep down the cost of living, especially in urban

areas; and farm subsidies to encourage expansion of farm production and achieve self-

reliance in food production.

Treasury bill: A short-term debt issued by a national government with a maximum

maturity of one year. Treasury bills are sold at discount, such that the difference between

purchase price and the value at maturity is the amount of interest.

WTO: The World Trade Organization is a global international organization dealing with therules of trade between nations. It was set up in 1995 at the conclusion of GATT negotiations

for administering multilateral trade negotiations.
http://en.wikipedia.org/wiki/Purchasing_powerhttp://en.wikipedia.org/wiki/Purchasing_powerhttp://en.wikipedia.org/wiki/Purchasing_powerhttp://en.wikipedia.org/wiki/Purchasing_power

importent banking

Documents