Saturday, 13 September 2014

Banking Interview Questions 2014 Part-1


1. Why do you want to enter banking?
Banking is one of the fastest growing sectors in India with more stable and high growth and more over providing wide range of career opportunities for graduates. So I want to take an opportunity to join in a bank.
2. What is the difference between Cheque and Demand Draft?
Both are used for transfer the amount b/w two accounts of same or different Bank. Cheque is written by an individual and withdrawn from the account whereas Demand draft is issued by a bank where you have to pay before issuing.
3.What are NBFCs and difference between NBFCs and Bank?
Non-bank financial companies (NBFCs) are financial institutions that provide banking services, but do not hold a banking license. NBFCs do offer all sorts of banking services, such as loans and credit facilities, retirement planning, money markets, underwriting, and merger activities. These institutions are not allowed to take deposits from the public.
4. What is Private Banking?
Banking services offered to high net-worth individuals. Private banking institution assists the high net-worth individual in investing his/her money in exchange for commissions and fees. The term "private" refers to the customer service being rendered on a more personal basis.
5. What is the Use of Computers in a Bank?
Computers are used for many purposes in banks like: Computer store details of customers account information. Computers can solve billions of complex mathematical operations in fractions of a second. Computers can be used for user authentication. Computers can be used on a network to instantly contact other branches. When you use an ATM, you are using a networked computer terminal. It's easier to access/update the information. An employee can also check a customer's account balance instantly. Computers help a bank save time and money, and can be used as an aid to generate profits.
6.What is recession?
What is the cause for the present recession? It can be defined as if country’s GDP growth is negative for two or more consecutive years and the main cause for the present recession is Sub-Prime crisis where it started in US.
7 What is Sub-prime crisis?
The current Subprime crisis is due to sub-prime lending. These are the loans given to the people having low credit rating.
8 What is a Repo Rate?
Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the banks have any shortage of funds they can borrow it from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases, borrowing from RBI becomes more expensive
9. What is Reverse Repo Rate?
This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels there is too much money floating in the banking system. Banks are always happy to lend money to RBI since their money is in safe hands with a good interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates.
10 What is CRR Rate?
Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks.


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