Banking Interview Questions 2014 Part-5

Question 1: What are non-performing assets?

Answers 1: Non-performing assets, also called non-performing loans, are loans,made by a bank or finance company, on which repayments or interest payments are not being made on time. A debt obligation where the borrower has not paid any previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The nonperforming asset is therefore not yielding any income to the lender in the form of principal and interest payments.

Question 2: What is Recession?

Answers 2: A true economic recession can only be confirmed if GDP (Gross Domestic Product)growth is negative for a period of two or more consecutive quarters.

Question 3. What is foreign exchange reserves?

Answers 3: Foreign exchange reserves (also called Forex reserves) in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities.However, the term in popular usage commonly includes foreign exchange and gold,SDRs and IMF reserve positions.

Question 4: What is the difference between Nationalized bank and Private Bank?

Answers 4: A Nationalized bank is one that is owned by the government of the country. Since the people decide who the government is, they are also referred to as public sector banks. The government is responsible for the money deposited into the accounts of these banks. Where as a private sector bank is one that is owned by an independent individual or a company that is controlled by a few individuals. In short, the bank is owned by someone else and they run the bank. The person owning/running the bank is responsible for the money deposited into the accounts of these banks.

Question 5: What is Customer Relationship Management (CRM)?

Answers 5:Customer Relationship Management (CRM) refers to the ability to understand, anticipate and manage the needs of the customer, interaction and relationship resulting in increased profitability through revenue and margin growth and operational efficiencies.

Question 6: What is Dematerialisation?

Answers 6: Dematerialisation is a process by which the paper certificates of an investor are taken back by the company/registrar and actually destroyed and an equivalent number of securities are credited in electronic holdings of that investor.

Question 7: What is Defivative?

Answers 7: A derivative is a financial contract that derives its value from another financial product/commodity (say spot rate) called underlying (that may be a stock, stock index, a foreign currency, a commodity). Forward contract in foreign exchange transaction, is a simple form of a derivative.

Question 8: What is Bancassurance?

Answers 8: Bancassurance stands for distribution of financial products particularly the insurance policies (both the life and non-life), also called referral business, by banks as corporate agents, through their branches located in different parts of the country.

Question 9: What is Liquidity Adjustment Facility (LAF)?

Answers 9: Liquidity Adjustment Facility (LAF) was introduced by RBI during June, 2000 in phases, to ensure smooth transition and keeping pace with technological upgradation.

Question 10: What is Money Laundering?

Answers 10: Money laundering means acquiring, owning, possessing or transferring any proceeds (of money) of crime or knowingly entering into any transaction related to proceeds of the crime either directly or indirectly or concealing or aiding in the concealment of the proceeds or gains of crime, within or outside India. It is a process for conversion of money obtained illegally to appear to have originated from legitimate sources.