bank intervew by prince

8/12/2019 Bank Intervew by Prince

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C o n t a c t m e a t J a m i a b b s @ g m a i l . c o m

2013

BANK INTERVIEWS

QUESTION WITH

ANSWERPrepared By Prince

Prince

Maa


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BANK INTERVIEWS QUESTION WITH ANSWER

If You have any Doubt or Suggestion Mail me @ [email protected] (Prince) Page 1

BANKING INTERVIEWS Questions

What is a bank?

A bank is a financial organization where people deposit their money to keep it

safe. And its authorized by a government to pay interest on deposits, pay

interest; clear checks make loans, act as an intermediary in financial

transactions, and provide other financial services to its customers.

What is banking?

The structural network of institutions that offer financial services within a

county. The members of the banking system and the functions they typically

perform include:

(1) Commercial banks that take deposits and make loans,

(2) Investment banks which specialize in capital market issues and trading

(3) National central banks that issue currency and set monetary policy.

What is cheque?

A cheque is a document that orders a payment of money from a bank account.

The person writing the cheque, the drawer, usually has a current accountwhere their money was previously deposited. The drawer writes the various

details including the monetary amount, date, and a payee on the cheque, and

signs it, ordering their bank, known as the drawer, to pay that person or

company the amount of money stated.

Drawer:The person who draws the cheque is known as the drawer.The person whose name the account stands is the drawer.

Drawee:The bank on which the cheque is drawn is known as thedrawee.

Payee:The person in whose favor the cheque is made payable is thepayee. If the cheque is drawn payable to self, the drawer himself would

be the payee of the cheque.

Types of Cheques


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1. Bearer ChequeWhen the words "or bearer" appearing on the face of

the cheque are not cancelled, the cheque is called a bearer cheque. The

bearer cheque is payable to the person specified therein or to any other

else who presents it to the bank for payment. However, such cheques are

risky; this is because if such cheque is lost, the finder of the cheque cancollect payment from the bank.

2. Order Cheque: When the word "bearer" appearing on the face of a cheque

is cancelled and when in its place the word "or order" is written on the face of

the cheque, the cheque is called an order cheque. Such a cheque is payable to

the person specified therein as the payee, or to any one else to whom it is

endorsed (transferred).

3. Uncrossed / Open Chequewhen a cheque is not crossed, it is known as an

"Open Cheque" or an "Uncrossed Cheque". The payment of such a cheque

can be obtained at the counter of the bank. An open cheque may be a bearer

cheque or an order one.

4. Crossed ChequeCrossing of cheque means drawing two parallel lines on

the face of the cheque with or without additional words like "& CO." or

"Account Payee" or "Not Negotiable". A crossed cheque cannot be encased atthe cash counter of a bank but it can only be credited to the payee's account.

5. Anti-Dated Cheque If a cheque bears a date earlier than the date on which

it is presented to the bank, it is called as "anti-dated cheque". Such a cheque is

valid up to six months from the date of the cheque.

6. Post-Dated Cheque If a cheque bears a date which is yet to come (future

date) then it is known as post-dated cheque. A postdated cheque cannot be

honored earlier than the date on the cheque.

7. Stale Cheque If a cheque is presented for payment after six months from

the date of the cheque it is called stale cheque. A stale cheque is not honored

by the bank.

What is CBS?


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Core banking system is a general term used to describe the services provided

by a group of networked bank branches. Bank customers may access their

funds and other simple transactions from any of the member branch offices

What is the difference between paid up capital and authorized capital?

Authorized capitalis the maximum amount a company is authorized to

collect from public by issuing shares while paid up capitalis the amount of

capital which company has currently issued to public in the form of shares or

public has provide the money to company for working.

For example:

Authorized capital $1000

Paid Up capital $100

Now company can issue shares of $900 more for public offering and not

more than that.

What do you know about New India Assurance Corporation limited?

New India is a leading global insurance group, with offices and branches

throughout India and various countries abroad.

What is Balance-sheet?

A summary of a company's financial condition at a specific point in time,

including assets, liabilities and Income and Gains. The first part of a balance

sheet shows all the productive assets a company owns, and the second part

shows all the financing methods (such as liabilities and shareholders' equity).

also called statement of condition.

Who was founder of PNB?

It was founded in 1894 by Lala Lajpat Rai and is currently the second largest

state-owned commercial bank in India with about 5000 branches across 764

cities

What is balance of trade?


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The balance of trade, or net exports (sometimes symbolized as NX), is the

difference between the monetary value of exports and imports of output in an

economy over a certain period. It is the relationship between a nation's

imports and exports. A positive balance is known as a trade surplus if it

consists of exporting more than is imported; a negative balance is referred toas a trade deficit or, informally, a trade gap. The balance of trade is sometimes

divided into a goods and a services balance.

What is the theory of rent?

The theory of rent was put forth by the Economist, Divid Recardo. According

to the Recardian theory of Rent, rent is differential surplus and arises from the

fact that land possesses certain popularities as a factor of production. It is

limited area and its fertility varies, besides, its situation is fixed, thus rentresults because

a) Fertility is more or less fixed in nature

b) The stock of land is fixed and cannot be increased.

What is LIC?

Life Insurance Corporation of India (LIC) is the largest insurance group and

investment company in India. Its a state-owned where Government of Indiahas 100%stake. LIC also funds close to 24.6% of the Indian Government's

expenses. It has assets estimated of INR13.25 trillion (US$241.15 billion). It

was founded in 1956 with the merger of 243 insurance companies and

provident societies.

What is export/import finance?

Import and export financing exists to enable business to take place overseas.

Import and export financing provides importers who have orders fromcustomers in the United States, or foreign customers backed by a letter of

credit, with the necessary financial backing to provide their overseas supplier

with a letter of credit to guarantee payment of goods.


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Tell me about banking system in India?

Public Sector Banks are the major recruiters of candidates aspiring for bank

jobs. These banks are:

1. The State Bank of India Group(Total1 SBI + 5 AASOSIATES SBI Banks)

State Bank of Bikaner & Jaipur State Bank of Hyderabad State Bank of Mysore State Bank of Patiala State Bank of Travancore

2. Nationalized Banks(Total: 19 Banks) namely Allahabad Bank, Andhra

Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank,

Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian

Overseas Bank, Oriental Bank of Commerce, Punjab & Sind Bank, Punjab

National Bank, Syndicate Bank, UCO Bank, United Bank of India, Union Bank ofIndia and Vijaya Bank.

3. Public Sector Banki.e. IDBI Bank Limited.

4. Private Sector Banks(Total: 27 Banks). The major recruiters in the private

sector include the ICICI Bank, HDFC Bank, Axis Bank, Federal Bank, Centurion

Bank of Punjab, Indusind Bank, Kotak Mahindra Bank, Yes Bank, ING Vysya

Bank, Bank of Rajasthan, Karur Vysya Bank, Karnataka Bank, Jammu &

Kashmir Bank, South Indian Bank, Bharat Overseas Bank, etc.5. Co-operative Banks

What is Direct tax?


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The term direct tax generally means a tax paid directly to the government by

the persons on whom it is imposed. Examples include corporation tax, income

tax, and social security contributions.

What is Indirect Tax?

A tax that increases the price of a good so that consumers are actually paying

the tax by paying more for the products. An indirect tax is most often thought

of as a tax that is shifted from one taxpayer to another, by way of an increase

in the price of the good. Fuel, liquor and cigarette taxes are all considered

examples of indirect taxes, as many argue that the tax is actually paid by the

end consumer, by way of a higher retail price.

If the capital is negative, how it will affect the company?

What is the public sector bank?

Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than

50%)is held by a government. The shares of these banks are listed on stock

exchanges. There are a total of 26 PSBsin India.

What is the section 80(c)?

This section covers investment in eligible securities, expenditures, payments

such as life insurance premium, contribution made under employee's

provident fund scheme, contribution to public provident fund (PPF), Post

office saving bank, any notified savings certificate (NSCs), Unit Linked

Insurance Plan (ULIPs), notified Mutual funds, tuition fees. This, along with

Sec 80 CCC (Premium Paid for Annuity Plan of LIC or Other Insurer.), 80 CCD


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(Contribution to Pension Account up to 10 per cent of salary), provides

deduction up to Rs 1 lakh.

At which side of the balance sheet liabilities show?

Left side of the Balance Sheet.

How many banks are there in your village?

Do you have any bank account?

WHAT do you mean by S.B.I LOGO?The logo of the State Bank of India is a blue circle with a small cut in the

bottom that depicts perfection and the small man the common man -

being the center of the bank's business.

Tell me the types of account?

Mainly there are four types of bank accounts. They are

Fixed or terms deposit Savings deposit Current deposit or current a/c Recurring deposit or a/c

What is Sub-prime crisis?Giving home loans to the people who dont have good credit rating.

Who and what is important for bank?

Customers and Money.

What is bank insuranceor Bancassurance?


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The Bank Insurance Model ('BIM'), also sometimes known as 'Bancassurance',

is the partnership or relationship between a bank and an insurance company

whereby the insurance company uses the bank sales channel in order to sell

insurance products

What is debit card?

A debit card (also known as a bank card or check card) is plastic Money that

provides the cardholder electronic access to his or her bank account at a

financial institution.

What is credit card?

A credit card is a payment card issued to users as a system of payment. It

allows the cardholder to pay for goods and services based on the holder'spromise to pay for them. The issuer of the card creates a revolving account

and grants a line of credit to the consumer (or the user) from which the user

can borrow money for payment to a merchant or as a cash advance to the

user.

What is the difference between current account and savings account?

Savings accounts (SA)are accounts maintained by financial institutions that

pay interest on the savings put in the account. These accounts are generallynot used for business transactions. Any individual either single or jointly can

open a savings account. The interest rates of SA accounts are higher. There are

no maintenance charges for the account. Cheques of only account holder are

collected in SA account. Any cash transactions of 10 lakhs and above in a year

will be informed to IT department.

Current Accountis primarily meant for businessmen, firms, companies, and

public enterprises etc. that have frequent banking transactions daily. Acustomer can deposit or withdraw any amount of money any number of times

in this type of account. Any major individual, two or more individuals in their

joint names, Sole Proprietorship Concerns, Partnership Concerns, Hindu

Undivided Family, Limited Companies, Clubs, Societies, Trusts, Executors and

Administrators, Others Govt. and semi Govt. bodies, local authorities etc. can


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open a current account. There is no interest for the account. There are no

restrictions on the number of transactions. Cash withdrawals per day exceeds

50000 per day will attract banking cash transaction tax (BCTT) at Re.1 per

1000. Third party cheques will be collected if they are endorsed.

What do you know about corporate banking?

Corporate & Investment banking is a term used to describe a range of banking

and investment products and services delivered to corporate clients, financial

institutions, governments, agencies and, in some cases, to wealthy or high-

net-worth individuals and families.

What is your account no. and ATM no.?

What is the process of collective bargaining?

Collective bargaining is a process of negotiations between employers and a

group of employees aimed at reaching agreements that regulate working

conditions. The interests of the employees are commonly presented by

representatives of a trade union to which the employees belong. The collective

agreements reached by these negotiations usually set out wage scales,

working hours, training, health and safety, overtime, grievance mechanisms,and rights to participate in workplace or company affairs.

What is subprime crisis?

A situation starting in 2008 affecting the mortgage industry due to borrowers

being approved for loans they could not afford. As a result, a significant rise in

foreclosures led to the collapse of many lending institutions and hedge funds.

The financial crisis in the mortgage industry also affected the global credit

market resulting in higher interest rates and reduced availability of credit.

Which bank recently merged in HDFC and why?

What is money laundering?


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Money launderingis the process of concealing the source of money obtained

by illicit means. The methods by which money may be laundered are varied

and can range in sophistication.

What is black money?

Black money refers to funds earned on the black market, on which income and

other taxes has not been paid.

What is mutual fund?

A mutual fund is a type of professionally managed collective investment

vehicle that pools money from many investors to purchase securities.

What are bank assurances?

The Bank Insurance also sometimes known as 'Bancassurance', is the

partnership or relationship between a bank and an insurance company

whereby the insurance company uses the bank sales channel in order to sell

insurance products.

What is difference between cheque and Demand Draft?

Cheque

1. A cheque is an unconditional order directing the banker to pay a certainsum of money only to or to the order of a certain person.

2. The current account and saving account holders get a cheque facility.3. Cheques are used to make payments or to settle transactions. There is

no certainty of payment in the case of cheques as they can be

dishonored or payment can be stopped.

4. In case of cheque, the drawer is the customer of the bank.5. The bank may not charge for issuing the cheque book.6. In case of cheque, the drawer can ask the bank to stop payment of the

cheque even if it is delivered to the payee.

7. In case of cheque, there is a need for clearance.


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8. Three parties are involved in cheque transaction viz., (a) Drawer, (b)Drawee, and (c) Payee.

Demand Draft

1. A draft is an order to pay money drawn by one office of a bank uponanother office of the same bank for a sum of money payable to order on

demand.

2. Draft is issued to anyone even to non-account holders.3. The main purpose of a draft is to transfer money from one place to

another or to guarantee the certainty of payment to the payee.

4. In case of draft, the drawer is the bank itself.5. The bank charges a nominal fee or commission to issue a draft.6. There is no question of dishonoring of draft.7. In case of draft, the purchaser of the draft can ask the bank to stop

payment before the draft is delivered to the payee.

8. Drafts do not enjoy much popularity as compared to cheques.9. In case of a draft, there is no need for clearance, if DD is drawn on the

same bank.

10. Two parties are involved in draft transaction viz., (a) Drawer, and(b) Payee.

What is PLR?

PLR is Prime Lending Rate. It is the rate at which banks across a country lend

the loan.

What is Basel Norms?

Basel is a set of standards and practices developed for global banks to ensure

that they maintain adequate capital to withstand periods of economic strain. It

is a comprehensive set of reform measures designed to improve theregulation, disclosures and risk management within the banking sector.

What did Basel I and Basel II focus on?


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Basel I norms was introduced in 1998, focused almost entirely on creditrisk. It defined capital requirement and structure of risk weights for

banks.

Basel II was introduced in 2004, laid down guidelines for capitaladequacy, risk management and disclosure requirements.

Why Basel III? It is widely felt that the shortcoming in Basel II norms is what led to the

global financial crisis of 2008. That is because Basel II did not have any

explicit regulation on the debt that banks could take on their books, and

focused more on individual financial institutions, while ignoring

systemic risk. To ensure that banks dont take on excessive debt, and

that they dont rely too much on short term funds, Basel III norms were

proposed in 2010.What is the biggest criticism against Basel III?

That the stringent capital requirements come at a time when theglobal economy is in the midst of a slowdown. This will leave

banks with less money to lend, in turn pushing up the cost of

borrowing; and thereby further aggravating the slowdown.

Why are many banks opposed to Basel III norms?Basel III norms will require banks to undertake significant

process and system changes to make upgrades, particularly in the

areas of stress testing, liquidity and capital management

infrastructure. The reforms could fundamentally impact

profitability and require sweeping changes in the business models

of many banks

What is the deadline for banks to become Basel IIIcompliant?

For international banks the deadline is December 31, 2018 and

March 31, 2018 for Indian banks.


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Why the earlier deadline for Indian banks?The RBI said that: We did this to align our date with the close of

the Indian fiscal year, which is March 31. We could have gone up

to March 31, 2019, but that would have overshot the Basel III

prescription by three months and would have attracted adverse

notice.

What is NPA?

A classification used by financial institutions that refer to loans that are in

jeopardy of default. Once the borrower has failed to make interest or principal

payments for 90 days the loan is considered to be a non-performing asset.

What do you know about citi bank?

Citibank, one of the major international banks, is the consumer banking arm of

financial services giant Citigroup. Citibank was founded in 1812 as the City

Bank of New York, later First National City Bank of New York. As of March

2010, Citigroup is the third largest bank holding company in the United Statesby total assets, after Bank of America (largest bank in World)and

JPMorgan Chase (Second largest bank in World). Citibank has retail banking

operations in more than 160 countries and territories around the world.

What is bank reconciliation?

Bank reconciliation is a process that explains the difference between the bank

balance shown in an organization's bank statement, as supplied by the bank,

and the corresponding amount shown in the organization's own accountingrecords at a particular point in time.

What is RTGS?

Real time gross settlement systems (RTGS) are funds transfer systems where

transfer of money or securities takes place from one bank to another on a


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"real time" and on "gross" basis. Settlement in "real time" means payment

transaction is not subjected to any waiting period. The transactions are settled

as soon as they are processed. "Gross settlement" means the transaction is

settled on one to one basis without bunching or netting with any other

transaction. Once processed, payments are final and irrevocable.

Question : How RTGS is different from Electronic Fund Transfer System

(EFT) or National Electronics Funds Transfer System (NEFT)?

Answer : EFT and NEFT are electronic fund transfer modes that operate on a

deferred netSettlement (DNS) basis which settles transactions in batches. In

DNS, the settlementTakes place at a particular point of time. All transactions

are held up till that time. ForExample, NEFT settlement takes place 6 times a

day during the week days (9.30 am,10.30 am, 12.00 noon. 1.00 pm, 3.00 pmand 4.00 pm) and 3 times during Saturdays (9.30 am, 10.30 am and 12.00

noons). Any transaction initiated after a designated Settlement time would

have to wait till the next designated settlement time. Contrary To this, in

RTGS, transactions are processed continuously throughout the RTGSBusiness

hours. RTGS system is primarily for large value transactions? The minimum

amount to be remitted through RTGS is Rs.2 lakh.

Is there any limit on the amount that could be transferred usingNEFT?

Ans: No. There is no limit either minimum or maximum on theamount of funds that could be transferred using NEFT. However,

maximum amount per transaction is limited to Rs.50,000/- for

cash-based remittances and remittances to Nepal.

Is corporation bank a public sector?

Yes

What is Debt security Equity ratio?


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A measure of a company's financial leverage. Debt/equity ratio is equal to

long-term debt divided by common shareholders' equity. Typically the data

from the prior fiscal year is used in the calculation. Investing in a company

with a higher debt/equity ratio may be riskier, especially in times of rising

interest rates, due to the additional interest that has to be paid out for thedebt.

For example, if a company has long-term debt of $3,000 and shareholder's

equity of $12,000, then the debt/equity ratio would be 3000 divided by 12000

= 0.25. It is important to realize that if the ratio is greater than 1, the majority

of assets are financed through debt. If it is smaller than 1, assets are primarily

financed through equity.

What is RE ratio?

Tell us types of capital?

1. Financial assets or the financial value of assets, such as cash.

2. The factories, machinery and equipment owned by a business.

Types of Capital

Constant capital, which refers to capital goods, Variable capital,which refers to labor-inputs, where the

cost is "variable" based on the amount of wages and salaries

are paid throughout the duration of an employee's

contract/employment, Fictitious capital,which refers to intangible

representations or abstractions of physical capital, such as

stocks, bonds and securities

Financial capital,which represents obligations, and isliquidated as money for trade, and owned by legal entities.


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It is in the form of capital assets, traded in financial markets.

Its market value is not based on the historical accumulation

of money invested but on the perception by the market of

its expected revenues and of the risk entailed.

Public capital,which encompasses the aggregate body ofgovernment-owned assets that are used to promote private

industry productivity, including highways, railways,

airports, water treatment facilities, telecommunications,

electric grids, energy utilities, municipal buildings, public

hospitals and schools, police, fire protection, courts and still

others.

Natural capital,which is inherent in ecologies andprotected by communities to support life, e.g., a river thatprovides farms with water.

Spiritual capital,which refers to the power, influence anddispositions created by a person or an organizations

spiritual belief, knowledge and practice.

What are the types of reserve?

Reserve is most commonly used to describe any part of shareholders'equity, except for basic share capital. In nonprofit accounting, an"operating reserve" is commonly used to refer to unrestricted cash on

hand available to sustain an organization, and nonprofit boards usually

specify a target of maintaining several months of operating cash or a

percentage of their annual income, called anOperating Reserve Ratio.

Secondary Reserves- Assets that are invested in safe, marketable,short-term securities.

Primary Reserves- Cash required operating a bank. Excess Reserves-Capital reserves held by a bank in excess of what is

required.

What is quasi capital?


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Funds, other than paid-up capital and retained earnings, employed in a

business and which will remain in a business as permanent capital is called as

quasi- capital.

Do you know how to make banks consultation statement?

What is Bank rate?Bank Rate is the rate at which central bank of the country (in India it is

RBI) allows finance to commercial banks. Bank Rate is a tool, which centralbank uses for short-term purposes. Any upward revision in Bank Rate bycentral bank is an indication that banks should also increase deposit ratesas well as Base Rate / Benchmark Prime Lending Rate. Thus any revisionin the Bank rate indicates that it is likely that interest rates on yourdeposits are likely to either go up or go down, and it can also indicate anincrease or decrease in your EMI.

What is repo rate?

The discount rate at which a central bank repurchases government securities

from the commercial banks, depending on the level of money supply it decides

to maintain in the country's monetary system. To temporarily expand the

money supply, the central bank decreases repo rates (so that banks can swap

their holdings of government securities for cash). To contract the money

supply it increases the repo rates. Alternatively, the central bank decides on a

desired level of money supply and lets the market determine the appropriaterepo rate. Repo is short for repossession.

What is reverse repo rate?


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A purchase of securities with an agreement to resell them at a higher price at a

specific future date. This is essentially just a loan of the security at a specific

rate. Also called reverse repurchase agreement.

What is bank rate?

Bank rate, also referred to as the discount rate, is the rate of interest which a

central bank charges on the loans and advances to a commercial bank.

How will you use your subject in banking?

I did BBS its acombination of commerce and management. I applied the

entire thing to manage mismanaged activity.

Describe RBI?

Reserve Bank of India (RBI) is India's central banking institution, which

controls the monetary policy of the Indian rupee. It was established on 1 April

1935 during the British Raj in accordance with the provisions of the Reserve

Bank of India Act, 1934. The share capital was divided into shares of 100

each fully paid which was entirely owned by private shareholders in the

beginning. Following India's independence in 1947, the RBI was nationalized

in the year 1949.It is a member bank of the Asian Clearing Union.

The general superintendence and direction of the RBI is entrusted with the

21-member-strong Central Board of Directorsthe Governor (currently

Duvvuri Subbarao), four Deputy Governors, two Finance Ministry

representative, ten Government-nominated Directors to represent important

elements from India's economy, and four Directors to represent Local Boards

headquartered at Mumbai, Kolkata, Chennai and New Delhi. Each of these

Local Boards consists of five members who represent regional interests, as

well as the interests of co-operative and indigenous banks.The RBI supervises the functioning of banks in the following ways:

It monitors that the banks actually maintain the cash balance.


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RBI sees that the banks give loans not just to profit-making businessesand traders but also to small cultivators, small scale industries, to small

borrowers etc

How many notes are issued by RBI?

5Rs, 10rs, 20rs,50rs,100rs,500rs and 1000rs

1 Rs/- is not issued by RBI?

One rupee note only issued by union government. That is only actual rupee. all

other higher denomination currency notes are only promissory notes issued

by governor, reserve bank of India.You will find "I Promise to pay the bearer a

sum of rupees ---" in all higher denomination notes

What is CRR? What are the reasons behind decreasing CRR?

The cash reserve ratio is a central bank regulation that sets the minimum

reserves that each commercial bank must hold (rather than lend out) of

customer deposits and notes

1. Government RegulationWhen the consumption power in theeconomy falls, the central bank reduces the amount of cash reserve ratio

required. This increases the amount of cash available for lending to thepublic. The increased money supply results in increased expenditure in

the economy. This increased spending results in accelerated economic

growth.

2. Reduced DepositsDuring economic crisis, such as inflation andrecession, the amount of deposits in banks diminish. The ability of

banks to maintain the required cash reserve ratio is reduced. This leads

to a decrease in the required cash reserve ratio.

3.

ProfitabilityDeposit-taking institutions, banks included, will record animprovement in their profitability if they lower their cash reserve

ratios. This is because reserves are non-interest-earning deposits. The

amount held in the reserves can be used to acquire new securities. Such

securities earn interest income, which substantially contributes to the


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overall profitability of a bank. Thus, need to earn extra income

influences reduction in cash reserve ratio.

4. Provide EmploymentA decrease in cash reserve ratio is implementedin order to enable individuals and firms access to loans at affordable

interest rates. These loans are then used to create self-employmentopportunities. Self-help groups also benefit from these loans. Such funds

are then utilized to create employment opportunities for the group

members.

5. Support Other Sectorsof the economy, such as agriculture, depend onfunds provided by banks. A decrease in cash reserve ratio avails cheaper

loans to farmers. These funds are then used to finance farming activities.

Other sectors, like the manufacturing sector, will also benefit from the

cheaper loans. Hence, the need to support other sectors of the economyleads to a reduction in cash reserve ratio.

6. LiquidityWhen the level of money supply in the economy is low,demand for goods and services will decline. The reduced demand

hampers economic growth. In order to reverse this trend, the Federal

Reserve Bank reduces the cash reserve ratio requirements, which leads

to increased money supply in the market.

Name the subsidiaries of SBI?

1. State Bank of Bikaner & Jaipur2. State Bank of Hyderabad3. State Bank of Mysore4. State Bank of Patiala5. State Bank of Travancore

What is final A/c?

Financial statement for a particular time period (financial year), for knowing

the financial status of the company is called final account


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What is partnership deed?

Partnership agreement in writing is called partnership deed. Partnership deed

is a document which is signed by all the partners and which contains all the

matters determining and governing the mutual rights, duties and liabilities ofthe partners in the conduct and management of the affairs of the partnership.

It may also be referred to as articles of partnership containing the name,

nature of business, capital, duration of the firm, etc.

What is partnership letter?

Have you heard about the loan waiver?

A loan waiver is the waiving of the real or potential liability of the person or

party who has taken out a loan through the voluntary action of the person or

party who has made the loan.

Describe NABARD?

National Bank for Agriculture and Rural Development (NABARD) is an apex

development bank in India having headquarters based in Mumbai

(Maharashtra) and other branches are all over the country. The Committee toReview Arrangements for Institutional Credit for Agriculture and Rural

Development (CRAFICARD), set up by the Reserve Bank of India (RBI) under

the Chairmanship of Shri B. Sivaraman, conceived and recommended the

establishment of the National Bank for Agriculture and Rural Development

(NABARD). It was established on 12 July 1982 by a special act by the

parliament and its main focus was to uplift rural India by increasing the credit

flow for elevation of agriculture & rural non-farm sector and completed its 25

years on 12 July 2007. It has been accredited with "matters concerning policy,planning and operations in the field of credit for agriculture and other

economic activities in rural areas in India". RBI sold its stake in NABARD to

the Government of India, which now holds 99% stake

Role of NABARD


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1. Serves as an apex financing agency for the institutions providinginvestment and production credit for promoting the various

developmental activities in rural areas2. Takes measures towards institution building for improving absorptive

capacity of the credit delivery system, including monitoring, formulation

of rehabilitation schemes, restructuring of credit institutions, training of

personnel, etc.

3. Co-ordinates the rural financing activities of all institutions engaged indevelopmental work at the field level and maintains liaison with

Government of India, State Governments, Reserve Bank of India (RBI)

and other national level institutions concerned with policy formulation4. Undertakes monitoring and evaluation of projects refinanced by it.5. NABARD refinances the financial institutions which finances the rural

sector.

6. The institutions which help the rural economy, NABARD helps develop.7. NABARD also keeps a check on its client institutes.8. It regulates the institution which provides financial help to the rural

economy.

9. It provides training facilities to the institutions working the field of ruralupliftment.

10. It regulates the cooperative banks and the RRBs.Describe SBI?

State Bank of India (SBI) is a multinational banking and financial services

company based in India. It is a state-owned corporation with its headquarters

in Mumbai, Maharashtra. As of March 2012, it had assets of US$360 billion and

14,119 branches, including 157 foreign offices in 32 countries across the globe

making it the largest banking and financial services company in India.

The bank traces its ancestry to British India, through the Imperial Bank of

India, to the founding in 1806 of the Bank of Calcutta, making it the oldest

commercial bank in the Indian Subcontinent. Bank of Madras merged into the

other two presidencies banksBank of Calcutta and Bank of Bombayto


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form the Imperial Bank of India, which in turn became the State Bank of India.

The Government of India nationalized the Imperial Bank of India in 1955, with

the Reserve Bank of India taking a 60% stake, and renamed it the State Bank

of India. In 2008, the government took over the stake held by the Reserve

Bank of India. SBI has been ranked 285th in the Fortune Global 500 rankingsof the world's biggest corporations for the year 2012.

SBI provides a range of banking products through its network of branches in

India and overseas, including products aimed at non-resident Indians (NRIs).

SBI has 14 regional hubs and 57 Zonal Offices that are located at important

cities throughout the country.

SBI is a regional banking behemoth and has 20% market share in deposits and

loans among Indian commercial banks.

Tell about depreciation?

the decrease in value of assets (fair value depreciation), and the allocation of the cost of assets to periods in which the assets are

used

What is the difference between private and public?

The private sectoris usually composed of organizations that areprivately owned and not part of the government. These usually includes

corporations (both profit and non-profit), partnerships, and charities.

public sectoris usually composed of organizations that are owned andoperated by the government. This includes federal, provincial, state, or

municipal governments, depending on where you live. Privacylegislation usually calls organizations in the public sector apublic body

or apublic authority.

Why bank are increasing or decreasing the interest rate?


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1)Increase savings, which will reduce bankruptcies andforeclosures,: many bankruptcies and foreclosures could be avoided if

individuals and businesses had an adequate savings account to buffer

them during times like this.

2)Increase value of the dollar, which will reduce inflation that is justaround the corner The massive amount of money ($5 trillion) that has

been added in the last year is making its way through the market and

when its gets to the people, it will create a massive wave of inflation.

Higher interest rates would help to reduce spending, which will reduce

inflating prices as more people bid for items that are in short supply.

3)Increase bank deposits so banks can lend money to smallbusinesses that can in turn create new jobs: Banks need money, but

not printed money that will lead to inflation. They need real money thathas been saved by the productivity of workers. The increase in bank

deposits will help banks lend money to the wave of small businesses

that are going to spring up and will be the biggest creators of new jobs.

4)Increase the rate of failed business models to clear the system:Newbusinesses that have a chance at creating new jobs by building new

products at a profit need the old businesses to fail. Higher interest rates

will force businesses that are no longer viable in the market to fold

quicker, which will help get them out of the marketplace so that theirworkers (employees) and capital (bank loans) can be freed up to be

used by new and growing businesses. This is what capitalism is best at

doing, but the government is interfering in the process.

5)Increase the motivation of entrepreneurs to go after opportunitiesEntrepreneurs are in high demand to rebuild the economy by going

after new ideas to produce profitable products and build a business of

lasting value and wealth. Low interest rates cheapen the value of money

and therefore reduce the value of hard work to produce long-termwealth. What good is it to work-hard to gain money when it has little

value in putting it to work for you?

6)Increase financial education: The public should be provided a truthfuland consistent message about money management. Its very important

to give the public an accurate understanding of sound money policy vs.


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the mixed messages they receive today from the politicians telling us to

continue spending even when we are flat broke.

7)Restore confidence in the banks: Banksoperate on the confidence oftheir customers. Confident customers add deposits, take loans and start

businesses to generate cash flow. If customers are afraid banks areabout to collapse or go bankrupt or become nationalized, they will not

do these things.

Summary The government has crossed the line and has taken too much

control of the financial system, forcing the banks to take on more risk rather

than less risk. Increasing the interest rates would give the bank a larger

margin and allow them to restore confidence, which would give them more

room to deal with bankruptcies and restructuring business loans when abusiness is in trouble. If allowed to function, banks could provide much more

help than they are today.

What is financial inclusion?

Financial inclusion is the process of ensuring fair, timely and adequate access

to financial services. These services are saving, credit, payment and

remittance facilities, and insurance services at an affordable cost in a fair and

transparent manner by the mainstream institutional players.

Who is the chairman of SEBI?

The Securities and Exchange Board of India (frequently abbreviated SEBI) is

the regulator for the securities market in India. It was established on 12 April

1992 through the SEBI Act, 1992(Upendra Kumar Sinha)

Who is the head of SEBI?

The SEBI is managed by its members, which consists of following:a. The chairman who is nominated by Union Government of India.b. Two members, i.e. Officers from Union Finance Ministryc. One member from The Reserve Bank of India.d. The remaining 5 members are nominated by Union Government

of India, out of them at least 3 shall be whole-time members.


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What is interest rate in SHG?

A self-help group (SHG) is a village-based financial intermediary usually

composed of 1020 local women. Most self-help groups are located in India,

though SHGs can also be found in other countries, especially in South Asia andSoutheast Asia.

Members make small regular savings contributions over a few months until

there is enough capital in the group to begin lending. Funds may then be lent

back to the members or to others in the village for any purpose. In India, many

SHGs are 'linked' to banks for the delivery of microcredit.

What is BSE and NSE?

Bombay Stock Exchange, commonly referred to as the BSE, is a stock exchange

located on Dalal Street, Mumbai, Maharashtra, India. It is the 10th largest

stock exchange in the world by market capitalization. Established in 1875,

BSE Ltd. (formerly known as Bombay Stock Exchange Ltd.), is Asias first Stock

Exchange and one of Indias leading exchange groups. Over the past 137 years,

BSE has facilitated the growth of the Indian corporate sector by providing it

an efficient capital-raising platform. Popularly known as BSE, the bourse wasestablished as "The Native Share & Stock Brokers' Association" in 1875.

Ramadorai is the Chairman of Bombay Stock Exchange (BSE)

The National Stock Exchange (NSE) is stock exchange located at Mumbai,

India. It is the 11th largest stock exchange in the world by market

capitalization and largest in India by daily turnover and number of trades, for

both equities and derivative trading.[2] NSE has a market capitalization of

around US$1 trillion and over 1,652 listings as of July 2012.[3] Though a

number of other exchanges exist, NSE and the Bombay Stock Exchange are thetwo most significant stock exchanges in India, and between them are

responsible for the vast majority of share transactions. The NSE's key index is

the S&P CNX Nifty, known as the NSE NIFTY (National Stock Exchange Fifty),

an index of fifty major stocks weighted by market capitalization.


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What is finance?

Finance is the study of how people allocate their assets over time under

conditions of certainty and uncertainty. A key point in finance, which affects

decisions, is the time value of money, which states that a unit of currencytoday is worth more than the same unit of currency tomorrow. Finance aims

to price assets based on their risk level, and expected rate of return.

Finance can be broken into three different sub categories:

public finance corporate finance Personal finance.

What is stock market?

A stock market or equity market is a public entity (a loose network of

economic transactions, not a physical facility or discrete entity) for the trading

of company stock (shares) and derivatives at an agreed price; these are

securities listed on a stock exchange as well as those only traded privately.

What is NFCL?

National Federation of Labour Cooperative also known as NFCL is an apexbody to help and solve the problems of Labour societies in the country. In

1981 NFCL had about 14000 societies which have increased to 39000 today.

Its presence was limited to only 7 states with 65 district labour cooperatives

but today NFCL encompasses 16 states with 215 district labour federation.

What is operation cycle?

The average time between purchasing or acquiring inventory and receiving

cash proceeds from its sale.What are the alternative forms of banking?

An alternative payment refers to payment methods that are used as an

alternative to credit card payments. Most alternative payment methods

address a domestic economy or have been specifically developed for


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electronic commerce and the payment systems are generally supported and

operated by local banks. Each alternative payment method has its own unique

application and settlement process, language and currency support, and is

subject to domestic rules and regulations.

What is cross-selling?

Cross-selling is a strategy of providing existing customers the opportunity to

purchase additional items offered by the seller.

What is social banking?

A new-age term to state that banks are no now longer solely concentrated on

earning profits but also interested in aiding society as a whole. This new

element often focuses on the environment, charity, poverty and education butthere can be a large number of topics and subtopics.

What is PIN? Where it is used?

Postal Index Number (PIN) or PIN Code is a 6 digit code of Post Office

numbering used by India Post. The PIN was introduced on August 15, 1972.

There are 9 PIN regions in the country. The first 8 are geographical regions

and the digit 9 is reserved for the Army Postal Service. The first digit indicates

one of the regions. The first 2 digits together indicate the sub region or one ofthe postal circles. The first 3 digits together indicate a sorting / revenue

district. The last 3 digits refer to the delivery Post Office.

Tell us the types of insurance?

1.Agricultural insurance2. Health insurance3. Life insurance4. ehicle insurance

What is the work of SIDBI?

Small Industries Development Bank of India (SIDBI) was established in

October 1989 and commenced its operation from April 1990 with its Head

Office at Lucknow as a development bank, exclusively for the small scale


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industries. It is a central government undertaking. The prime aim of SIDBI is

to promote and develop small industries by providing them the valuable

factor of production finance. Many institutions and commercial banks supply

finance, both long-term and short-term, to small entrepreneurs. SIDBI

coordinates the work of all of them.

Function of Sidbi

(i) Initiates steps for technology adoption, technology exchange, transfer and

upgradation and modernisation of existing units.

(ii) SIDBI participates in the equity type of loans on soft terms, term loan,

working capital both in rupee and foreign currencies, venture capital support,

and different forms of resource support to banks and other institutions.(iii) SIDBI facilitates timely flow of credit for both term loans and working

capital to SSI in collaboration with commercial banks.

(iv) SIDBI enlarges marketing capabilities of the products of SSIs in both

domestic and international markets.

(v) SIDB1 directly discounts and rediscounts bills with a view to encourage

bills culture and helping the SSI units to realise their sale proceeds of capital

goods / equipments and components etc.

(vi) SIDBI promotes employment oriented industries especially in semi-urban

areas to create more employment opportunities so that rural-urban migration

of people can be checked.

What is consumer surplus?

An economic measure of consumer satisfaction, which is calculated by

analyzing the difference between what consumers are willing to pay for agood or service relative to its market price. A consumer surplus occurs when

the consumer is willing to pay more for a given product than the current

market price.


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Q. Where do you see yourself at the end of you career.

As a regional mangerWhat is the regulatory role of RBI?

RBI describes its basic functions to regulate the issue of bank notes, keep

reserves to secure monetary stability in India, and generally to operate the

currency and credit system in the best interests of the country.

What is monetary policy of RBI?

The Reserve Bank of India is the main monetary authority of thecountry and beside that the central bank acts as the bank of the national

and state governments. It formulates, implements and monitors themonetary policy as well as it has to ensure an adequate flow of credit to

productive sectors

what are bonus shares?

Bonus shares are free shares issued by the company to its existingshareholders. Bonus shares are issued in a ratio of the shares an

investor hold. For example when a company offers 1:5 bonus shares, it

means a share holder will get 1 free share for 5 shares. So if an investorholds 100 shares at the time of bonus then they will become 120 shares.

What are fictitious assets?

These are assets not represented by tangible possession or property. Example

of preliminary expenses discount on issue of shares, debit balance in the profit

and loss account when shown on the assets side in the balance sheet.

What is break-even point?

Break-even is the point of balance between making either a profit or a loss.


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What is goodwill? Where it is recorded in balancesheet?

Goodwill is an accounting concept meaning the value of an asset owned that is

intangible but has a quantifiable "prudent value" in a business. For example, a

reputation the firm enjoyed with its clients.

How banks are contributing to the economy of India?

The economic development of our country depends more on real factors like

the industrial development, modernization of agriculture, organization of

internal trade and expansion of foreign trade, especially exports, and less on

the monetary factors contributed by bankingEconomic planning like

laying down of specific targets and allocating particular sums of money that

constitute the economic policy of the government also plays a significant role.Still we cannot under-estimate the importance of banking and the monetary

mechanism.

One of the most important problems of a developing economy is that of capital

formation. There is a good deal of difference between hoarding and saving and

the people in the countryside have to be made to realize the difference. This

can be easily done by banks. They can undertake to educate the rural

populace and thus mobilize their savings. A number of leading economists

have confirmed the fact that the amount of capital available in India forinvestment is surprisingly and inexplicably large. Only we need exploiting this

idle capital. Who else can exploit it, if not banks? Both in rural and urban

areas, huge amounts of money are wasted on celebrations like marriages and

births. If banks can offer handsome interest on savings, people can be

induced to direct their savings from wasteful activities to banks. Promoting

attractive deposit schemes needs some very active work on the part of the

banks, but it can certainly mobilize a large amount of saving for capital

formation.

The Government of India has now undertaken a large number of projects for

the economic reconstruction of the country. Banks can generate an adequate

volume of credit and conduct it along useful productive channels. They can

distinguish between the essential and non-essential factors of the economy


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between productive and non-productive investment, between speculative

arid non-speculative borrowing and thus help in the growth of the economy.

Two other acute problems faced by our low and middle income groups are the

housing problem and gnawing unemployment problem. If the banksundertake to help these groups, they will also be making a significant

contribution to our economy. It will also help in removing the economic

imbalance of the various sections of our society.

Before nationalization, our banks could not play this constructive role

expected of them. But after nationalization, the entire banking machinery has

now been geared to the economic development of the country. They have

started looking after the needs of the small farmer and the new entrepreneur.

It is earnestly hoped that the Government will take some more positive stepsto ensure that the real benefits of an organized banking system percolate

down to the poor illiterate masses of India.

What is the definition of hypothecation?

The established practice of a borrower pledging an asset as collateral for a

loan, while retaining ownership of the assets and enjoying the benefits

therefrom. With hypothecation, the lender has the right to seize the asset if

the borrower cannot service the loan as stipulated by the terms in the loanagreement. Hypothecation also refers to securities in a margin account that an

investor uses as collateral to borrow funds from a brokerage.

What is promissory note?

A signed document containing a written promise to pay a stated sum to a

specified person or the bearer at a specified date or on demand.

Like Bond, Rupes.What is bill of exchange?

The bills of exchange is a document in writing, containing an unconditional

order signed by the maker directing a certain person to pay on demand or at a


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fixed or determinable future time period, the certain sum of money only to or

to the order of a certain person or to the bearer of the document.

What are the rights of banker when there is no limitation?

Duties of bankers

A. Bankers must act with a duty of care in opening a bank account for acustomer and it is his duty to make satisfactory inquiry when opening

new account for a customer.

B. Banker has a Duty to receive money and collect bills for its customersaccount and money or bills so deposited should be credited to the

customers account. However, the banker should act with reasonable

care and due diligence in collecting of checks for the customers account.C. There is an implied duty on the banker to honor his customers checks,if the checks are drawn in the proper manner and presented during

banking hours.

D. Duty of secrecy is a very important principle of the banking law. Thusthe banker should not disclose information to a third party about the

balance of its customers account and even any fact which arise with

Regard to the customers bank account.

Bankers rights

A. Bankers have a right to dishonor his customers checks where there isno sufficient fund for payment

B. In customary banking practice, bankers are entitled to the bankers lien.C. Banker could exercise the right of set-off. That is to say banker has a

right to retain a credit balance in one account in place of a debt balance

in another. This right enables bankers to combine his customers

accounts, if the customerborrower has defaulted in paying a debt

having an account in the bank with a credit balance.


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Customers rights in customer/banker relationship

A. Customer has a right to receive money in his account on his demand.B. Customer has a right to close his account.C. It is a right of a customer to receive the interest on his deposits.D. Customer has a right to draw checks on his current account.

Duties of the customer

A. Customer has an implied duty to exercise reasonable care in drawingchecks.

B. It was established throughout the history of banking business that thecustomer had an implied duty to inform the banks if he discovered

checks purporting to have been signed by him have been forged.

What is the role of NABARD over RRBs?

Providing finance and also refinance for production and marketing inthe rural areas.

Coordinating and advising the operations of institutions engaged inrural credit.

Promoting research in agriculture and rural development. Conduct inspections of the RRBs and the co-operative societies, without

any prejudice to the authority of the RBI.

All the applications for opening a branch by RRBs or co-operativesocieties should be forwarded to the RBI through the NABARD.

Copies of all returns submitted by the RRBs and co-operative societiesto the RBI should also be furnished to the NABARD.

NABARD is also empowered to obtain any information or statementfrom the RRBs and the co-operative societies


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What do you mean by tangible and intangible asset?

Tangible assetsare considered the goods of material nature they can be

perceived by senses like: Row material and stocks, The furniture, The

machines, The lands, The money

Intangible assetsare considered the goods of immaterial nature. Like

The science of knowing what to do Our relations with the clients Our operative processes The technology of information and databases. Capacities, abilities and innovations of the employers.

What is a foreign reserve?

Foreign reserves alsocalledforex reserves or FX reserves are assets held

by central banks and monetary authorities, usually in different reserve

currencies, mostly the United States dollar, and to a lesser extent the euro, the

United Kingdom pound sterling, and the Japanese yen, and used to back its

liabilities, e.g., the local currency issued, and the various bank reserves

deposited with the central bank, by the government orfinancial institutions.

What is Banking Ombudsman?Banking Ombudsman is a Customer Redressed Authority setup by RBI.

You can register your complaint at the following address.

bankingombudsman.rbi.org.in .They will surely help you if you

complaint is genuine. But make sure that you have all written

communication or documents to prove your case.

Wish u a Good Luck for your & Mine interview

Friends please let me know this is helpful for you or not at

[email protected] Prince

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