The purpose of interview:
The
purpose of interview is to select suitable person for the concerned post. The
person to be interviewed may be having better qualifications; however, he may
not be having better communication ability, leadership quality and
interpersonal relationship. Banking demands people who are willing to work
hard; to mingle with customers freely and friendly and move with their
colleagues in amicable manner.
Phases of the interview:
The
interview is conducted in four phases namely;
·
the first phase during the course of which
questions are posed about the person and his specialization;
·
the
second phase wherein questions are asked about the bank which is conducting the
interview;
·
the third phase wherein questions on
general banking and finance and latest developments are asked.
·
The fourth phase is closing the interview
The interview committee:
The
interview committee consists of three imminent personalities
·
The first member analyses the body language
of the individual
·
The second member studies the answering
ability of the individual
·
The third member judges about the
capability of the individual for the post
The
main purpose of posing the questions is to provoke the candidate emotionally,
intellectually thereby pressurizing him to come out with appropriate replies
available in his mind.
The interview process:
The
interview process consists of the following:
·
Completion of certificate verification and
paper work;
·
Waiting for the turn at the waiting hall;
·
Entering interview room after seeking
permission of the members;
·
Thanking the interviewer who allowed the
candidate inside the cabin;
·
Sitting on the seat offered;
·
Thanking the person who had offered the
seat;
·
Shaking the hands of the members if
offered;
·
Attending the interview maintaining eye
contact;
·
Contacting all paper works after the
interview is over;
·
Thanking the interviewers
·
Walking out calmly and closing the door
slowly
Dress code:
·
Dress code is more important and a person
is judged by the dress he wears.
·
For men: Please wear a neat trouser and
full length shirt – preferably white colored or light shaded; Using “T” shirts
will dampen your image and do not opt for “T” shirts. Wear a good quality shoes
neatly polished. If possible you can wear a “tie” – this is purely optional and
in northern parts of the country persons wearing “tie” is considered to be
dynamic.
·
For girls: Under no circumstances do not
wear provoking dress namely; “T” shirts; jeans pants; trousers and shirts with
messages and blouses with low cuts. A neat chudithar is considered to be the
best and wearing sarees improves the image of the individuality.
Questions during the first phase:
·
Initially the candidates are invited to
tell about themselves, their family members, their ambitions, their
qualifications, their achievements in studies, sports, music and other extra
curricular activities;
·
The second question is about the place
where the candidate belongs. In case the candidate belongs to Kanchipuram, he
will be asked to tell about Kanchipuram and the positive points about the
place. Necessarily the candidate should have a thorough knowledge about the
place from which he is hailing;
·
The interview will pose “ice breaking
questions” in order to shift the focus of the candidate. This is for the
purpose of finding out the reaction of the candidate during such “focus
change”. (Banks demand people who are able to meet any challenges);
·
The first two to three minutes will tell
more than 80 percent of the candidate. It has to be remembered that – “first
impression is the best impression”.
Sample questions during the first
phase:
·
Tell
something about yourself (You should inform about yourself,
your family, your qualification, achievements etc in a crisp manner.
Unnecessary explanation should be avoided)
·
I
see – you are from Tiruchirapally – please tell me about Tiruchirapally:
Tell about Tiruchi – the river Kaveri; Rock temple; Sri Rangam, Samayapuram and
many more;
·
You
had studied in Presidency college. Why you preferred this college. How was your life in the college?
·
You
had studied “EEE” - why you chose the course?
·
You
had mentioned your surname as “Kavirayar” – what is the reason?
·
You
are in Chennai for the past one year. What is your opinion about Chennai?
·
You
are having “EEE” in engineering and why do you prefer banking?
(Your reply should be – In fact by working in bank, I can develop my
relationship with customers, improve my knowledge and serve many people)
·
What
are your strengths and weaknesses? – Your answer: I am
always willing to work hard irrespective of the situation – I have good
communication ability and I develop friendship in a fast manner; I love to
mingle with people –
·
You
are highly qualified having MBA and engineering degree – what is the guarantee that you will be in
our bank for many years? (The reply should not be: On account of
unemployment problem I am joining your bank; Your reply should be – even though
I have good qualifications, I wish to work in the bank)
(The
candidate should do a home work – he should analyse his strength – weaknesses
and positive points – during the course of the interview negative reply or
angry reply should not be made under any circumstances- when provoked or
tempted the candidate should remain calm and smile pleasingly during such
occasions)
The
following question may provoke the candidate –
·
You
had dressed like Rajnikanth – do you think that you are Rajnikanth?
(Your reply should
be– In fact I am his fan and used to see many of his films since his films
contain good messages which are useful for life)
Second phase of the interview process:
During
this phase, questions will be asked about the bank for which the candidate is
appearing for the interview and the following are some sample questions:
·
Do you know – where is the head office of
Canara Bank?
·
Who is the present chairman of the bank?
·
How many branches Canara Bank is having as
on date?
·
Can you tell me about the total business of
the bank?
·
Why Canara Bank is named after Canara?
·
Can you tell me about some deposit schemes
available in the bank?
·
What do you know about the logo of Canara
Bank?
·
What is the punchline of Canara Bank?
Third phase of the interview:
During
this phase, questions will be asked about general banking practices as follows:
·
Have you visited any bank branch? What is
your experience ?
·
What is the business of any bank?
·
What are the prime functions of any bank?
·
What are the secondary functions of any
bank?
·
Who can open a savings bank account?
·
What do you know by KYC guidelines?
·
What is the difference between Current
account and Savings account?
·
Who normally opens current account?
·
What do you know by fixed deposit account?
·
Can a company can open a savings account?
·
Can the director of a company can open a
savings account?
·
Who is the controlling authority for the
banks in India?
·
What is a foreign bank?
·
What is meant by public sector bank?
·
Which is the largest private sector bank in
the country?
·
Which is the largest bank in the country?
·
You are working as an officer in savings
department. The customer complains about the irritating behavior of the clerk
who is working under you. What you will do in this situation?
·
Your manager delegates some work and you
are failing in doing the work within the allotted time and your manager is not
happy with your performance. How you will convince your manager?
·
Today there is a news about monetary credit
policy. What do you know by that?
·
What do you know by reverse repo?
·
What is called as inflation?
·
What is rupee convertibility?
·
What do you know by gross domestic product?
·
What do you know by ASBA?
·
What do you know by Sensex?
·
What do you know by a convertible
debenture?
·
What is initial public offer?
·
What do you know by facebook – whether it
is good for any individual and what is your opinion?
(The
above questions are illustrative and not exhaustive and the candidate should
know fairly well about many banking aspects)
The fourth phase of the interview:
Like
the initial phase or first phase – this fourth phase is also important and
wherein tricky questions will be asked as mentioned below:
·
You are hailing from Tiruchirapalli. In
case you are posted to Chennai whether you will be willing to work in Chennai.
(Your answer: If I am posted at Tiruchirapalli, I can do justice to the bank as
well as the family members dependant on me)
·
Suddenly on account of computer crash, you
have to sit late – whether you will be willing to sit late and finish the job
or leave early without informing your superiors? (Definitely I will never mind
in sitting late and I will always cooperate with my manager in finishing the
day to day functions of the branch)
·
What
are you willing to tell about you? ( If I am selected, I shall work hard and I
shall discharge my duties to the entire satisfaction of my superiors. I will do
always the best from my side)
QUESTION
BANK
01. What are the functions of
any bank? – The bank accepts deposits from the public and
lends loans to the public. Acceptance of deposits and lending loans are called
as the primary functions. The secondary functions are – selling gold coins,
selling insurance products and selling mutual fund products. Apart from the
above, the banks open demat accounts also.
02. What do you know by demand
deposits? – Current account and savings accounts are
called as demand deposits. Current account is opened for business purpose
carrying no interest and savings deposit is opened for the purpose of saving
the money and it carries interest. The interest is at present decided by
respective banks.
03. What do you know by KYC
guidelines? – KYC means Know your customer guidelines.
According to KYC, the bank demands address proof and identity proof from the
public when they open accounts with the bank. For address proof, copes of
ration card, voter ID card, AATHAAR card, telephone bill etc. are obtained. For
identity proof, copies of identity card issued by the employers, voter ID card,
driving licence, AATHAAR card etc. are obtained by the bankers.
04. What do you know by term
deposits? – Fixed deposits, recurring deposits and
reinvestment deposits are called as term deposits since these deposits are
opened for specific period. The minimum period for which the term deposit is
opened – 7 days and the maximum period: 10 years. Interest is paid according to
the period of deposit. Interest is decided by the respective banks only.
05. What do you know by fixed
deposit? – Fixed deposits are opened for a minimum period
of seven days and maximum period of ten years. Interest is paid according to
the period of deposit. In this scheme, a lump sum amount is deposited for a
fixed period and interest earned is obtained from the bank on quarterly basis.
In case the customer demands, interest is paid by the bank on monthly or fortnightly basis.
06. What do you mean by
recurring deposit? – According to this scheme, the customer can
remit monthly or quarterly a fixed
amount for a fixed period. For example, an amount of Rs. 1000/- can be
deposited for 60 months and interest is paid to the depositor according to the
period of deposit along with the principal amount on maturity of deposit.
07. What do you know by
reinvestment deposit? – Reinvestment scheme is nothing but fixed
deposit. Instead of getting the interest on fixed amount on monthly or
quarterly basis, the customer can get
the interest on maturity along with principal amount. Since interest is
reinvested, the customer is eligible to get interest for interest also.
08. What do you know by PAN
number? – PAN number is required for IT purposes and when
more than Rs. 50000/- is invested in time deposit accounts or remitted in
current or savings deposit accounts, the customer has to mention the PAN number
in the remittance slips.
09. Whether deposits can be
opened in the name of minor? – Yes,
deposits can be opened in the name of minors. The accounts are opened in the
name of minor duly represented by father and mother and they are called as
natural guardians. When the minor is a student and aged more than ten years, he
can operate the account himself. For this purpose, he should produce a
certificate from the headmaster or principal of the school where he is
studying.
10. Whether minor is eligible
for loans – Loans should not be granted to minors as per law
and as per law the loans granted to the minors cannot be demanded by legally.
11. What do you know by PIN
number? – PIN number is a four digit number used when
the customer operates automated teller machines. The PIN number consists of
four digits and instead of PIN number, thumb impressions are recorded in
biometric ATMs
12. What do you know by bank
nationalization? – As much as fourteen banks owned by private
entrepreneurs were nationalized on 19.7.1969 so that they can meet social
obligations. During the second phase, six banks were nationalized on 15.4.1980.
New Bank of India got merged with Punjab National Bank and as at present there
are twenty public sector banks including IDBI bank.
13. What do you know by
foreign bank? – Foreign banks have their headquarters in a
foreign country; however, they have branches in India as permitted by Reserve
Bank of India.
14. What do you know private
sector banks? – At present there are fourteen old private
sector banks in our country and seven new private sector banks namely; Axis
bank Limited, Development Credit Bank Limited, HDFC Bank Limited, ICICI Bank
Limited, Indus Ind bank Limited, Kotak Mahindra Bank Limited and Yes bank
Limited. According to the revised norms fixed by Reserve Bank of India, the new
private sector banks should have a minimum capital base of Rs. 200 crore.
15. What do you know by
central bank? Central bank is the bank which governs other
banks in the country. In our country RBI is the central bank. It has its
headquarters at Mumbai and the following are the functions of RBI namely –
currency note issue, banker to the banks, financial adviser to the government,
custodian of cash reserves of banks, lender of the last resort and controller
of credits etc.
16. What do you know by issue
of currency notes in the country? In our
country, up to one rupee note and coins, Government of India undertakes to
issue and currency notes coins valuing more than one rupee are issued by
Reserve Bank of India.
17. What do you know by
scheduled commercial banks? – The public sector
banks, SBI and its subsidiaries, all private sector banks, foreign banks and
Regional Rural Banks are called as scheduled commercial banks. They should have
been included in the second schedule of RBI act 1934; got licence for
conducting banking business as per Banking Regulation act, 1949 and should have
been incorporated either as per companies act or cooperative act.
18. What do you know by
commercial banks? – Commercial banks are banks which function for
profit and the following banks are included under the category of commercial
banks by RBI – State Bank and its subsidiaries, all nationalized banks
including IDBI bank, all private sector banks and foreign banks. The
cooperative banks and regional rural banks are not treated as commercial banks.
19. What do you know by cheque
book? Cheque books are issued when the customer is
having current account, savings deposit account or overdraft account. Cheque
books are issued for the purpose of withdrawal of money from the account.
Cheques are not issued in the case of term deposits namely; fixed deposit,
reinvestment deposit and recurring deposit. In the case of term deposits, the
customers are issued with deposit receipts mentioning therein the details of
deposits.
20. What do you know by
minimum balance? – When a customer is maintaining current account
and savings account, he should maintain minimum balance in the account. The
minimum balance is prescribed by the respective banks. When the amount falls
below the minimum balance during any day, penal charges are levied in the
account.
21. What do you know by
automated teller machines? – Automated Teller Machines
are used for the purpose of allowing the customer to withdraw money twenty four
hours a day using ATMs. The following services are available through automated
teller machines namely – cash withdrawal, balance enquiry, mini statement up to
last ten entries, pin number change, mobile recharge, e-ticketing, transfer of
funds etc.
22. What do you know by TDS? TDS is called as tax deducted at source. When a customer having a
fixed deposit account or reinvestment deposit account earns interest amount
more than Rs. 10000/- tax is deducted at source from the account according to
income tax laws prevalent in the country.
23. What do you know by core
banking solution? According to core banking solutions, all
branches of the bank are interconnected through a common server and a customer
can transact the business in his account from anywhere in the country.
24. What do you know by real
time gross settlement? _ According to RTGS, a
customer can send money more than Rs. 200000/- from his account to any other
account of another person having his account with the branch of the same bank
or any other bank. For example, a customer having an account with Canara Bank,
Kellys branch at Chennai can transfer the amount to the account of his father
with State Bank of India, Canning Street, Kolkatta. Banks charge normal service
charges for the remittance facility.
25. What do you know by either
or survivor? – When more than one individual opens an account it
is called as a joint account. Since the account is opened jointly by more than
one person, the account holders should specify the conditions for operation of
the account to the banker. In the case of E or S account, anyone of the
customers can operate the account individually. In the case of joint accounts,
all accountholders should operate the accounts jointly.
26. What do you know safe
deposit locker? – It is a facility provided by the bank for
safekeeping the valuable articles. Lockers are available in different sizes and
according to the size of the locker, charges are collected for the lockers. The
lockers are operated by the locker holder and the banker and for this purpose,
the customer is given one key pertaining to the locker and the banker is having the master key for
the entire unit.
27. What do you know by
nomination facility in the account? Nomination
facility is available for deposit
accounts namely; current account, savings account, fixed deposit, reinvestment
deposit account and recurring deposit account. The customer nominates a person
for the account to receive money on the death of the depositor.
28. What do you know by safe
custody service? – According to the scheme for safe custody service,
customers can safe keep their valuables with the banker for nominal service
charges. The valuables are kept in sealed packets or bundles and handed over to
the banker and the banker on receipt of the packet or bundle, furnishes a
receipt and when the customer is in need of the packet or bundle, he has to
produce the receipt to the banker.
29. What do you know by
proprietorship account? When a customer maintains
an account in his personal name, it is called as individual account and when he
opens an account in the name of a firm owned by him, it is called as
proprietorship account. For example, Balaji conducting a printing press can open
an account in the name of Balaji Printing services and this is a proprietorship
account opened for business purposes and Balaji is called as proprietor.
30. What do you know by
partnership account? When more than one person joins together to
conduct a business, it is called as a partnership firm and the partners invest
the capital either equally or according to the terms as agreed between the
partners. The rules and regulations of the business are recorded in partnership
deed. The partnership deed can be registered or non registered.
31. What do you mean by
crossing of the cheque? – When two parallel
transverse lines are drawn on the face of the cheque, it is called as crossing.
When two simple transverse lines are drawn, it is called as general crossing
and when the name of a banker is mentioned between the two parallel lines, it
is called as special crossing.
32. What is the purpose of
crossing of the cheque? – Cheques are crossed so
that they should be encashed through
accounts only. This is to avoid fraudulent encashment of the cheques by
miscreants.
33. What do you know by order
cheque? Normally the cheques are payable to the person
mentioned in the cheque or to the bearer. In the case of uncrossed bearer
cheque, the person named in the cheque or any bearer can get payment of the
cheque from the bank counter. When the words, “bearer” are cancelled, the cheque is treated as order
cheque and for encashing an order cheque, the customer has to prove his
identity to the banker.
34. What do you know by
shares? – For the purpose of building fixed capital, joint
stock companies are authorized to issue shares to the public. Shares can be
issued in the form of ordinary shares or preference shares. Ordinary
shareholders are entitled to vote during the annual general body meeting and
they do not have any predetermined dividend amounts and in the case of
preference shareholders, they are paid dividend according to predetermined
rates.
35. What do you know by Debentures
?: It is a sort of loan document. Those who advance
loans to the company are called as debenture holders. Normally debentures are
issued through initial public offer as in the case of shares. Predetermined
rate of interest is paid to the debenture holder, whether the corporation earns
profit or suffers loss.
36. What do you know by SEBI? It is the principal regulator in the capital market in the country –
both the primary and secondary segments. It has also been conferred with the
powers to regulate the mutual funds and venture capital funds in the country.
37. What do you know by call
money? It is an important segment of the Indian Money
Market. Under call money market, funds are transacted on overnight basis and
under notice money market, funds are transacted for the period between 2 days
and 14 days. Banks borrow in this market, in order to fill the gaps or
temporary mismatches in funds; to meet the cash reserve ratio and statutory
liquidity ratio and to meet sudden the demand
for funds arising out of large outflows. Banks, primary dealers, development
finance institutions, insurance companies and select mutual funds are
participants in this market.
38. What do you mean by
Treasury bill?: They are money market instruments to finance the
short term requirements of the Government of India. There are different types
of treasury bills based on the maturity period and utility of the issuance
like, adhoc treasury bills, three months, six months and 12 months treasury
bills etc.
39. What do you know by call
money? – Call or notice money is an amount borrowed or
lent on demand for a very short period. If the period is greater than one day
and up to 14 days, it is called as notice money; otherwise the amount is known
as call money. Cooperative banks, commercial banks and primary dealers are
allowed to borrow and lend in this market for adjusting their cash reserve
requirements.
40. What do you know by
certificate of deposits? – It is a negotiable short
term promissory note in nature. It is issued at a discount to the face value,
the discount rate being negotiated between the issuer and the investor.
41. What do you know by
commercial paper? – Commercial papers are negotiable short term
unsecured promissory notes with fixed maturities, issued by well rated
organizations. These are generally sold on discount basis. Organisations can
issue commercial papers either directly or through banks or merchant banks
called as dealers.
42. What do you know by
primary market? – Primary market deals with new securities – it
can be otherwise called as new shares issued to the public. The new offerings
by the companies are made through an initial public offer or rights issue of
shares to the existing shareholders
43. What do you know by
secondary market/stock market? – It is the
market for buying and selling securities of the existing companies. Under this
scheme, securities are traded and being initially offered to the public in the
primary market and/or listed on the stock exchange. The secondary market
dealings are done through the share brokers in the stock markets situated in
various cities in the country.
44. What do you know by the
term called as savings bank ? – It is a
financial institution whose primary purpose is to accept savings deposits. It
may also perform some other functions. These banks are much helpful for
salaried people and low income groups. The deposits collected from customers
are invested in bonds, securities etc.
45. What do you know by
commercial banks? – It is an institution which accepts deposits,
makes business loans and offers related services. The commercial banks also
allow for a variety of deposit accounts, such as checking, savings and time
deposits. Their main purpose is to make a profit. Commercial banks apart from
acceptance of deposits and lending loans provide services like collection of
cheques and bills of exchanges, remittance of money from one place to another
place etc.
46. What do you know by
industrial banks and development banks? – They are
development banks engaged in promotion and development of industry. SIDBI is a
development bank engaged in helping industries in getting loans from public
sector and other banks. NABARD caters to the needs of agriculture and National
Housing Bank is meant for helping housing development. EXIM bank helps for
import and export development in the country.
47. What do you know by
indigenous banks? – Indigenous banks mean money lenders and
sahukars. They collect deposits from the general public and grant loans to the
needy persons out of their own funds as well from deposits. They are much
popular in villages and small towns.
48. What are the different
types of loans provided by banks? – Cash
credits, overdrafts, loans and advances, discounting of the bill of exchange
and investment in government securities are various loan facilities provided by
any bank. Cash credits are loans granted against stock of goods. Overdrafts are
clean loans granted in current accounts. The other loans are housing loans,
educational loans, consumer loans, gold loans, other agricultural loans, industrial loans etc. .
49. What do you know by debit
card?- They are cards issued by the banks on current
and savings accounts. Using debit cards the customers can withdraw funds using
automated teller machines or they can purchase goods through point of sale
terminals situated at textile shops, petrol pumps, hotels and other outlets.
The card can be also used for purchasing e-tickets, air tickets and many more.
50. What do you know by credit
card? – Credit cards are post paid cards whereas the
debit cards on the other hand is a prepaid card with some stored value. Every
time, a person uses this card, the internet banking house gets money transferred
to its account from the bank of the buyer.
51. What do you know by stale
cheque?- When the cheque becomes out of date and cannot
be encashed, it is termed as stale cheque. For example, the validity period of
any cheque is three months and when a cheque dated: 10.01.2012 is presented for
payment on 10.01.2013, it is considered as a stale cheque, since the cheque is
more than three months old.
52. What do you mean by post
dated cheque?- When the date of the cheque is beyond the date
on which the cheque is presented for payment, the cheque is considered to be
post dated. For example, when a cheque dated: 10.02.2013 is presented for
payment on 10.01.2013, it is considered to be a post dated cheque.
53. What do you know by currency
chest? – Currency chests are operated by RBI so that
they can provide good quality currency notes to the public. However, RBI has
appointed commercial banks to open and monitor currency chests on behalf of
RBI. The cash kept in currency chests is considered to be kept in RBI and
54. What is meant by minimum
balance to be maintained in the accounts? In the
case of savings bank and current account deposits, the banks stipulates a
minimum balance to be maintained. The minimum balance varies from bank to bank
and when the balance in the account falls below the minimum balance then banks
debit the account with some penal charges. Some banks insist quarterly average
minimum balance to be maintained instead of regular minimum balance to be
maintained.
55. What do you mean by tax
deduction at source? TDS means tax deducted at source. Banks must
deduct tax from the interest paid on the fixed deposit when the interest paid
on fixed deposits to a customer exceeds Rs. 10000/- during the accounting year.
TDS is applicable to fixed deposits only and is applicable to savings bank
deposits.
56. What do you mean hindu
undivided family? – HUF means Hindu Univided family and it is the
legal entity duly recognized by the laws in India. The account of hindu
undivided family is operated by Karta and karta is the seniormost male member
in the family. The remaining members in the family are called as coparceners.
Banks can open deposit accounts and also extend loan facilities to hindu
undivided family.
57. What do you know by MICR? – MICR means magnetic ink character recognition. Nowadays, the
cheques are issued in MICR formats in metropolitan centres namely; Mumbai,
Chennai, Kokatta, Bangalore etc. The micr code is readable by a reader sorter
computer which helps in quick sorting of the cheques towards immediate
adjustment of the amount to be received and paid by the banks in the clearing
house. MICR code consists of the following namely; the cheque number, name of
the city, name of the bank, name of the branch, account category etc. and banks
simply type the amount of the cheque in the MICR portion using scanners so that
the sorter reader is able to read the entire information in regard to the
cheque instantaneously.
58. What do you mean by cheque
truncation? – Under cheque truncation, the physical cheque
is replaced by the digital image of the cheque after scanning. Once the cheque
is truncated the physical cheque is cancelled and from the moment of truncation
only the digital image has life. The digital image of the cheque which contains
the digital signature of a bank officer as to its authenticity is processed by
all banks and payment is effected. Cheque truncation helps in quick processing
of the cheques drawn even on far away places since there is no necessity to
physically move the cheque from one place to another place.
59. What do you mean by ECS?- ECS means electronic
clearing service and this facility is used where a large number of small value
payments or receipts are to be made or received. ECS can be used for either
debit transactions or credit transactions. When a company wants to pay
dividends to large number of shareholders, they use ECS credit facility and by
debiting the company’s account, the shareholders accounts are credited with the
dividend amount instantaneously. Similarly when an accountholder can use ECS
debit facility towards effecting payment to telephone charges each month.
60. What do you mean by
bankassurance? Hitherto banks were dealing with acceptance of
deposits and lending loans to the customers apart from undertaking certain
ancillary services. Nowadays banks started selling insurance policies of
prominent insurance companies by having tie up arrangements with such companies
and banks earn commission for such transactions.
61. What do you mean by
Universal banking? – Universal banking is the concept under which
banks can provide various types of services namely; deposits, loans, safe
deposit lockers, safe custody services, dealing with mutual fund schemes,
selling insurance policies, selling gold coins, dealing with issue of shares
and debentures etc. Thus at present banks are becoming like a supermarket for
all kinds of financial products and such concept is called as universal
banking.
62. What do you mean by
Regional Rural Banks? – The Regional Rural Banks are relatively new
banking institutions which were added to the Indian banking scene since
October, 1975. The distinctive feature of a rural bank is that though it is a
separate body corporate with perpetual succession and common seal, it is very
closely linked with the commercial bank which has sponsored the proposal to
establish it.
63. What do you mean by
National Housing Bank?- National Housing Bank
was established under the National Housing Bank act, 1987 as an apex body and
the key function of National Housing Bank is the development of the housing
sector and it is a wholly owned subsidiary of Reserve Bank of India. National
Housing Bank undertakes the following activities namely; promotion and
development of housing finance companies; regulation and supervision of housing
finance companies and providing both direct finance and indirect finance to
housing sector.
64. What do you mean by
NABARD? – National Bank for agriculture and rural
development was set up in 1982 as an apex development bank in the field of
agricultural finance and rural development. NABARD is set up by the Government
for the purpose of facilitating credit flow for promotion and development
agriculture and integrated rural development. It covers supporting all other
allied economic activities in rural areas, promoting sustainable rural
development and ushering in prosperity in the rural areas
65. What do you mean by EXIM
Bank? – Export and Import Bank of India was set up
during the year, 1982 for the purpose of financing, promoting and facilitating
foreign trade in the country. It is wholly owned by the Government of India.
The bank apart from enhancing exports from the country, integrates the
country’s foreign trade and investment with the overall economic growth.
66. What do you mean by SIDBI? – SIDBI was established for the purpose of assisting and promoting
small scale industry. It was established on 2.4.1990. It is the principal
financial institution established for the promotion, financing and development
of industry in the small scale sector and to coordinate the functions of the
institutions engaged in the promotion and financing or developing industry in
the small scale sector.
67. What do you mean by NBFCs? – Non Banking Finance Companies provide finance for small ventures
but at the same time they are more customer oriented and operate at low volumes
compared to the banks. They also collect deposits from customers and offer
slightly higher interest rates on deposits compared to the banks.
68. What do you mean NEFT and
RTGS – The two options namely – national electronic
funds transfer and RTGS – real time gross settlement offered by Reserve Bank of
India allow electronic transfer of funds from the remitter who has an account
in one bank to the beneficiary who has account in any other bank/branch. The
transfer can be carried out using the internet banking facility. The minimum
amount that can be transferred by RTGS is Rs. 2.00 lakh and there is no such
limit for transfer through NEFT. It is settled in batches at times defined by
the Reserve Bank of India. RTGS transactions are settled continuously as and
when they are put through. The transfer of funds through NEFT and RTGS can also
be carried out by submitting the remittance form at the remitter’s bank branch.
69. What do you mean IFSC code? – IFSC means Indian financial system code. It is a eleven digit code
to identify the bank branch. IFSC code is used while transferring the funds
using RTGS and NEFT payments.
70. What do you mean by
financial inclusion? In spite of vast growth in the banking system,
a large number of poor people are still
not served by any bank. They are living outside the purview of any bank.
Financial inclusion is delivery of financial services at an affordable cost to
the vast population of disadvantaged/low incomes sections of the society
71. What do you mean No frill
accounts? No frill accounts are accounts with very low or
nil minimum balance as well as charges to be opened by the banks as targeted by
Reserve Bank of India. KYC norms are relaxed for opening no frill accounts so
that people living in rural and semi urban areas can open the accounts
conveniently. Overdrafts upto Rs. 25000.00 are allowed in the no frill accounts
72. What do you mean by narrow
banking? – It is the system of banking under which the
bank accepts deposits from the public and places the funds accepted in 100
percent risk free assets with maturity matching for its liabilities. The bank
takes no risk of lending at all.
73. Who are business
facilitators and business correspondents? – RBI has
permitted the banks to use the services of business facilitators and
correspondents with effect from 2006. The services of non governmental
officers, microfinance institutions and civil society organizations can be
utilized by the banks. They help the banks in identifying the borrowers processing
their applications etc. without involving in business transactions. No approval
of RBI is necessary. Correspondents will do all the above and will also
participate in business transactions in a small way.
74. What do you mean by non
performing assets? – Non performing assets means bad loans. When
the principal and interest in the account becomes overdue for more than 90
days, it is treated as non performing assets. Non performance assets are
classified into sub standard assets, doubtful assets and loss assets. Banks are
willing to keep the level of non performance accounts at the lowest.
75. What are the major risks
faced by banks according to Basel II norms? –
Banks are facing credit risk, market risk and operational risk. When the bank
lends an advance, it faces credit risk and sometimes the banks may not be able
to recover the loan amount from the borrowers. In the case of failure of any
bank product, the banks face market risk and operational risk occurs on account
of failure of systems available in the bank branches namely; staff unrest;
striking employees; computer failure; automated teller machines out of order
etc.
76. What do you mean by
merchant banking? – Merchant banking stands for provision of
various services to corporate clients by helping them to access capital market.
Merchant banks help the corporate customers to approach the capital market with
initial public offers for the purpose of collection of capital by way of
shares.
77. What do you mean by demat
accounts? Demat means dematerialization. During the early
days, shares and debentures certificates were issued in physical form in the
form of certificates. At present, they are issued in electronic form. It is the
process by which paper securities are converted to electronic form so that they
can be stored, sold and transferred easily.
78. What is a depository? – A depository holds the securities of the investors in electronic
form. In our country there are two depositories namely; NSDL – National
Securities Depositories Limited promoted by National Stock Exchange and CDSL –
Central Depository Services Limited promoted by Bombay Stock Exchange.
79. What do you know by
consortium financing? When a corporate is in need of huge finance –
say Rs. 200 crores and above, banks join together and extend the loan
facilities by sharing the loan amount between themselves. This reduces the risk
for each bank. The banks jointly process the application of the borrower and sanction
the advance and this is called consortium lending.
80. What do you mean by repo
rate? – It is the rate at which RBI lends short term
funds to the commercial banks against securities. In order to temporarily
expand the money supply, the central bank decreases repo rates enabling the
banks to swap the government securities for cash. Repo is the abbreviation of
Repurchase and to contract the money supply RBI increases the repo rates.
81. What do you mean reverse
repo ? – The reverse repo rate is the interest rate
that banks receive if they deposit money with the central bank. This reverse
repo rate is always lower than the repo rate. Increases or decreases in the
repo and reverse repo rate have an effect on the interest rate on banking
products such as loans, mortgages and savings.
82. What do you mean by CRR? – CRR means Cash Reserve Ratio and as per the stipulations by
Reserve Bank of India, all banks are in a position to maintain a certain
percentage of their deposits (technically called as net demand and time liabilities)
in their account with the RBI. CRR ranges from 5 percent to 15 percent. By
increasing CRR by merely 0.25 percent, an amount of Rs. 15000 crores of liquid
funds can be transferred from the commercial banks to the coffers of RBI. When
CRR is reduced, the liquid funds are transferred from RBI to commercial banks.
83. What do you mean by SLR? – Statutory Liquidity Ratio refers to the stipulation by RBI that
approximately 25 percent of the banks deposits is to be kept in the form of
government securities, gold and cash. Primarily SLR refers to the amount
invested by the banks in Government of India securities. RBI has the right to
change the statutory liquidity ratio from time to time. On reduction of SLR,
the availability of funds for the banks moves up and banks tend to more loans
to the common public. In the case of increase in SLR, banks reduce bank
lending.
84. What do you mean by PLR? –
Prime lending rate is the rate at which
commercial banks are willing to lend to their triple A rated No 1 borrowers.
The lending rates by the bank for other borrowers whose credit worthiness is
low will be more than prime lending rate. RBI has deregulated the lending rates
that are to be charged by the banks for advance above Rs. 2 lakhs.
85. What do you mean by BPLR? – It is the rate at which commercial banks must charge to all their
advances less than Rs. 2 lakhs.
86. Who is a non resident
Indian? – Non resident Indian is the person who is the
Indian citizen who is residing in abroad for more than 182 days and has gone
for abroad for the purposes namely; business, studies and employment.
87. What are the different
types of accounts that can be opened by Non Resident Indians? – Non resident ordinary account, Non resident External account, FCNR
account and RFC account.
88. What are the different
currencies in which FCNR accounts can be opened? – FCNR accounts can be opened in the following currencies namely; US
dollar, pound sterling, Euro, Australian dollar, Japanese Yen and Canadian
dollar. FCNR accounts can be opened for a minimum period of one year and
maximum period of three years
89. What are the traditional
functions of RBI? – The traditional functions of RBI are – issue
of currency, forex management, export assistance, clearing house functions,
change of currency, transfer of currency, publication of statistics and other
information and training in banking.
90. What are the developmental
functions of RBI? – The developmental functions of RBI are –
agriculture development, promotion of industrial finance, promotion of export
through refinance, development of bill market, development and regulation of
banking system.
91. What are the regulatory
functions of RBI? – The regulatory functions of RBI are –
qualitative credit control, bank rate, differential rate of interest, open
market operations, Maintenance of CRR and SLR, direct action, credit
authorization scheme and moral persuasion
92. What are the different
types of financial institutions in our country? – The various financial institutions in our country are – RBI –
Reserve Bank of India; SEBI – Securities and Exchange Board of India and IRDA –
Insurance Regulatory and Development Authority of India. RBI monitors the
various banks in the country; SEBI monitors and regulates capital markets and
IRDA monitors the functions of insurance companies.
93. What are the different
types of banks in our country? – In our
country the following banks are available – savings banks; commercial banks;
industrial banks; development banks; land development banks; indigenous banks;
central bank; cooperative banks; exchange banks and consumer banks
94. What are the different
types of secondary functions of any bank? – They
are agency or representative functions; general utility services and social
development functions.
95. What do you mean by agency
or representative functions of any bank? – They are
collection and payment of various items; purchase and sale of securities;
trustee and executor; remitting money; purchase and sale of financial exchange;
letter of references and other agency functions.
96. What are the general
utility services offered by the banks? – They
are locker facilities; business information; help in transportation of goods;
acting as a referee; issuing of letters of credit; acting as underwriters;
issue of traveler cheques; issue of gift cheques and dealing in merchant
banking activities
97. What are the social
development functions of a bank ? – They are
capital formation; inducement to innovations; impact on the rate of interest;
role on the development of rural sector; helping in pushing up the demand
98. Can you name some items
which are covered under negotiable instruments act? – They are promissory notes, bills of exchanges; cheques, exchequer
bills; circular notes; dividend warrants; share warrants; bearer debentures;
bank notes and bank drafts
99. What do you mean by
priority sector advance? – In order to boost
development of agriculture and industries, Government of India has stipulated
certain norms under which banks are in a position to allocate 40 percent of
their advances exclusively to certain categories of borrowers called as
priority sector advances. The following are classified into priority sector
advances namely – retail traders, small business, professional and self
employed; agriculture; small scale industries, self help groups, differential
rate of interest and SC/ST beneficiaries
100. What do you mean by weaker
sections? – The following categories are termed as weaker
sections namely – small business enterprises; marginal farmers;
artisans/village and cottage industries for whom loans are granted upto Rs.
50000.00; SGSY beneficiaries; SC/ST beneficiaries; DIR beneficiaries; SJSRY
beneficiaries; SLRS; self help groups and people belonging to minority
community.
PRACTICAL QUESTIONS
You are an officer recently posted in the bank
branch of State Bank of India and under the following situation how you will
act?
101. You are in charge of
deposits counter and a customer approaches you on 12.01.2013 with cheque dated:
12.01.2012 for an amount of Rs. 1000/- payable to bearer – The cheque cannot be paid since it is dated: 12.01.2012. Normally the
cheque is valid for three months only. I shall return the cheque to the
customer informing him of the facts.
102. The second customer approaches you with a cheque dated: 10.01.2013 favouring Kannan or
order: Since the cheque is found to be an order cheque, I have to exercise
much care to identify the person. I shall request the customer to prove his
identity and request him to produce a
driving licence, voter id card, AATHAAR card or identify card issued by his
employer and when I am satisfied with the identity of the person, I shall
permit him to withdraw the amount.
103. Five minutes later, the
third customer approaches you with a crossed cheque dated: 12.03.2013 for an
amount of Rs. 5000.00 and demands payment: - On
the one hand the cheque is dated 12.03.2013 and is found to be post dated and I
cannot pay the cheque; On the other hand, the cheque is crossed and the
customer can get payment of the cheque through his account only.
104. The fourth customer
approaches you with a cheque crossed to Indian Overseas Bank and the cheque is
dated: 10.01.2013 for an amount of Rs. 5000.00 favouring the customer: - The cheque is crossed to Indian Overseas Bank and necessarily the
customer can get the payment of the cheque through his account with Indian
Overseas Bank only. The cheque cannot be paid through his account with SBI..
105. The fifth customer
approaches you with a cheque dated: 10.01.2013 for an amount of Rs. 5000.00. On
going through the cheque you find that amount in the cheque has been written as
“five thousand five hundred only”: According
to Negotiable Instruments Act, when the amount mentioned in words and figures
differ, the amount mentioned in words has to be taken into account and I shall
arrange to make payment for Rs. 5500.00.
106. An old lady comes to you
and requests you to help her in opening a savings bank account – For opening savings account, she has to produce two passport size
photographs; provide identify proof and address proof and she can produce her
voter ID card for this purpose; she has to remit the minimum amount required
for opening the account. I shall provide her the bank account opening form and
once filled in I shall check the details and direct her to meet the Manager in
charge for getting his authorization for opening the account.
107. A customer approaches you
and requests you to help him opening a savings bank account for his partnership
firm – Savings bank account cannot be opened by a
partnership firm. However, as an Individual he can open savings bank account
for himself and not in the capacity of a partner in his partnership firm.
108. The partner of a
partnership firm approaches you for opening one current account for the
partnership firm. – I shall request the customer to produce the
details about the various partners. I shall demand from him, the copy of
partnership deed in respect of the firm and from the partnership deed, I shall
find out the operation conditions. I shall provide him the necessary
application form and advise him that the authorized partners should come
personally to the bank branch for opening the account along with passport size
photographs, address proof and identify proof, a copy of partnership deed and
the minimum balance required for opening the account.
109. A student aged 12 years
old approaches you for opening savings bank account in his name and how will
you guide him? Savings bank accounts can be opened in the name
of minors under two conditions. The minor can himself open the account provided
he is a student and produces a certificate from the Headmaster or Principal of
school stating that he is a bonafide student studying in the school and subject
to other formalities an account can be opened in his name in individual
capacity. Otherwise either his father or mother should open an account in his
name and the account will be operated by his natural guardian till the minor
attains majority.
110. A minor boy approaches you
with a cheque for an amount of Rs 5000 payable to bearer. The cheque can
be paid to the minor provided the cheque is in order in all respects. There is
no harm in paying the amount of the cheque to the minor.
BANKS - PUNCHLINES
01. Allahabad
Bank – A tradition of trust
02. Andhra Bank
– For all your needs
03. Bank of
Baroda – India’s International Bank
04. Bank of
Maharashtra – One family one bank
05. Bank of
India – Relationship beyond banking
06. Canara Bank
– Together we can
07. Central
Bank Of India – Build a better life around us
08. Corporation Bank – Prosperity for all
09. Dena Bank – Trusted Family Bank
10. Indian Bank – Your tech friendly Bank
11. Indian Overseas Bank – Good people to grow with
12. Oriental Bank of Commerce – Where every individual is committed
13. Punjab National Bank – The name you can bank upon
14. Punjab and Sind Bank – To strive to achieve excellence in customer
service
15. Syndicate Bank – Faithful and friendly
16. United Commercial Bank – Honours your trust
17. Union Bank of India – Good people to bank with
18. United Bank of India – The bank that begins with “U”
19. Vijaya Bank – A friend you can bank on
20. State Bank of India – With you all the way
21. State Bank of Hyderabad – Modern Innovative dependable
22. State Bank of Mysore – Working for a better tomorrow
23. State Bank of Patiala – Blending modernity with tradition
24. State Bank of Travancore – Since 1945 – a long tradition of trust
25. ICICI Bank – Hum Hai Na
26. IDBI Bank – Banking for all
27. HSBC bank – World’s local bank
28. HDFC Bank – We understand your world
29. Bank of Rajasthan – Together we prosper
30. Federal Bank – Your perfect Banking partner
31. Yes Bank – Experience our expertise
32. Jammu and Kashmir Bank – Serving to empower
33. Lakshmi Vilas Bank Limited – The changing face of prosperity
34. Karur Vysya Bank – Smart way to Bank
35. Deutshe Bank – A passion to perform
36. South Indian Bank Limited – Experience Next Generation Banking
Wishing you all the best
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