Interview Preparation Tips and Study material

What is interview?

An interview is a conversation between two or more people where questions are asked by the interviewer to elicit facts or statements from the interviewee.

Bank interview questions are meant to measure the attitude, skill and adjust ability of the candidate , to draw a conclusion on his/her suitability in the bank.

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Common Tips for All bank Interviews 


 Do’s and Don’ts during interview

-Reach interview venue on time.

-Make yourself calm and comfortable while you are waiting outside

-When your interview call comes knock he door softly and take permission of the board for entry like-

-Sir… Please may I come in. When interviewer say come in , say thank you after permission.

-Softly close the door and wish the board with gentle standing posture.

-If there is any Female in board, then wish her first.

-Remember time carefully and wish accordingly Good morning, good afternoon or good evening.

-Before 12 o’clock- Good Morning

-Between 12-4 Good afternoon

-After Pm- Good evening

-Wait till board asks/permits you to sit and say thanks before sitting.

-Sit in straight posture with hands in your lap/thigh. Avoid fidgeting and slouching

-Make your eye contact with the board

-Voice must be Clear/Audible/Humble and polite.

-Give answers confidently.

-Be positive, honest and be yourself

-Always say thank you sir when board informs/ corrects you any where.

-When you are unable to answer any question say-

-Sorry sir I do not know

- Sir I have heard about it but I am unable to recall at the movement, sorry sir.

-When board say thanks your interview is over-

-Thank you sir.. Have a nice day(before 4 PM)
- Take care of voice modulation.

Don’ts

-Don’t make excuses. Take responsibility for your decisions and your actions.

-Do not make negative comments about your previous employer.

-Donot treat the interview casually , as if you are just shopping around or doing the interview for practice.

-Donot give impression that you are interested in particular location only and not talk about salary and perks until the subject brought by interviewer.

- Don't assume that female interviewer is Mrs. or Miss. Address her as madam unless told otherwise.

 - Don't smoke before interview or chew gum during interview.

- Don't allow your cell phone to ring during interview.(if it does, apologize quickly and ignore it)  

- Avoid hand movement

- Avoid looking up and down.

- Avoid hiding eyes it shows lack of confidence.

- Don't forget to wish the board.

- Don't sit untill the board asks to do so.

-Never put your file or hand on table.
- Don't show irritation while board ask questions.
- Do not try to defend yourself in wrong answers.
- Do not make noise while sitting and leaving the chair.
- Never ask questions to the Board.

Interview Attire or Dress up

 For Male candidates-
Trouser- Do not wear Jeans during interview. Trouser should be formal one not stylist one.
Shirts- Full sleeve shirts, even in summer. Choose white or light stripes
Ties- Select good quality tie. avoid fashion extremes.
Socks- Dark socks , mid calf length so no skin is visible when you sit down.
Shoes- Leather, lace-up preferably Black. well polished
Belt- Black leather, to match your shoes.
Facial hair- Well groomed. Take pocket comb along with you on interview day, before entering in room groom it properly.
Clothes should be clean and well ironed.

For Female Candidates-
Suit- wear a two - piece matched suit.
Cosmetics- Keep makeup conservative. Avoid extremes of nail length and polish color, especially in conservative industries.
Shoes- Should be leather or fabric. Choose closed - toe pumps. Make certain you can walk comfortably in your shoes; hobbing in uncomfortable shoes does not convey a professional appearance.
Hosiery- Should be plainly styled (no patterns), sheer (not opaque) and in neutral colors complementing your suit.
Purse/Bag- If you carry a purse, keep it small and simple, purse color should coordinate with your shoes.

Grooming Tips for Everyone

Hair- Should be clean and neat
Shoes- Should be in polished condition. Make sure heels are not worn.
Details- No missing buttons, no lint, and donot forget to remove external tags and tacking stitches from new clothes.
Hands- Clean Fingernails
Fit- Clothes should be clean, neatly ironed and fit properly
Smell- Perfume or cologne should be used sparingly or not at all. No odors in clothes. Donot smell like having smoked.

Interviews start with a personal question like - introduce yourself or tell us something about you. Also, during interview, interviewers focus on knowing the personality traits of the individual. As these questions are related to you only, you can thoroughly prepare them in advance. This requires a  indepth self analysis of yourself and build a good story around you. After looking at your achievements, you can chose to form a story which covers your achievement and hardships or something which shows you in a positive light. Some of the personality related questions, which you must prepare are -

1. Tell us something about yourself?

In this section interviewer focus on following areas-

1.  Personal- Meaning of your name, family background, about the city you belong(its history, founder, famous places, economy, surroundings etc.), Date of birth( importance of day, any famous person born on that day).

2.Academics- Questions must be focused on your subjects that you study in graduation

 If you have gap more than 2 years then you must be ready to fill this gap with logical reason. 

If marks are decreasing order, then give appropriate reason

If science field then give reason why you opt for banking?

Whats the use of your subject in banking?

3.  Hobbies- You must be perfect in his/her hobbies. Board can ask any question related with your hobby . So tell hobby cautiously.

4.  Job nature- In this interviewer ask various questions related with banking terms and other banking and finance knowledge.

5. Current News- Every candidate is advised to read newspaper regualarly for a whole month before your interview and analysis the news and discuss with friends.

 Sample

1. When interviewer ask you about yourself starts like that- Sir, I am …your name…….. . I have  Done…… Qualification………….. My hobbies are………… In my family ……. No. of members.  My father is ………. And mother ………….(Father and mother profession).We are ……… no. of brother and sister.

If you have working experience then mention your experience after your qualification.

2. Strength and weakness- that you told should be according to your personality.

3.When they ask why you want to join Bank?- Reply like that- I want to join bank because banking is a very fast growing sector which provide me aple growth  opportunity  .
1) Banking Sector offers tremendous growth opportunities. Candidates reach from Trainee Officer level to a General Manager level.
2) Bank Employees have respect in society, since there is direct interaction with the customers.
3) One of the maojor reason is Job security, especially with Public Sector Banks.
4) Banks provide a challenging working environment, anyone who loves to achieve work goals will definitely like a banking job.

Banking sector is a sunrise sector of Indian economy. It is one of the fastest growing sector as banks are expanding their reach across the geography. As probationary Officer role is a multi-dimensional role, it offers unparalleled opportunities for learning and growth. Many of the chairman of the PSU banks had joined the bank as Probationary officers only.

Questions related with Banking Terms

1.     what is bank?

A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customers with capital surpluses. 

2. What is the difference between Cheque and Demand Draft?

Cheque: Cheuqe is a negotiable instrument instructing a bank to pay a specific amount from a specific account held in the maker/depositor name with that Bank.

 Demand Draft: A demand draft is an instrument used for effecting transfer of money. It is a negotiable instrument.

 3. What is a Non-Banking Financial Company (NBFC)?

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).

 4. What is Pradhan Mantri Jan dhan Yojna?

Pradhan Mantri Jan Dhan Yojana

The government rolled out its ambitious financial inclusion programme, the Pradhan Mantri Jan Dhan Yojana (PMJDY)

The programme is Prime Minister Narendra Modi's first blockbuster social upliftment scheme and is aimed at improving the lives of millions of India's poor by bringing them into the financial mainstream and freeing them from the clutches of usurious moneylenders, while giving them a modicum of insurance cover.

 The slogan for the Pradhanmantri Jan Dhan mission is expected to be ” Mera Khata – Bhagya Vidhaata” which when translated into English means ” My Bank Account – The Creator of the Good Fortune”:

Benefits under Yojana

Every individual who open a bank account becomes eligible to receive an accident insurance cover of up-to 1 Lakh rupees for his entire family.

Moreover, an additional 30000 rupees life insurance cover will be provided for those opening bank accounts before 26 January 2015.

Once the bank account became active for 6 months and being linked to account holders Aadhar identity, they would become eligible for an overdraft of up to 2500 rupees, which would further be enhanced by the bank to 5000 rupees over time.

The Jan Dhan Yojana also seeks to provide incentives to business and banking correspondents. The banking correspondents act as link for the last mile between savings account holders and the bank by fixing a minimum monthly remuneration of 5000 rupees.

The long term vision of the Jan Dhan Yojana is to lay the foundation of a cashless economy and is complementary to the Digital India Scheme.

Accidental Insurance given by- HDFC ergo

Life Insurance by- LIC

5. What is Swachh Bharat (Clean India) campaign?

Prime Minister Narendra Modi on 2 October 2014 launched Swachh Bharat (Clean India) campaign in New Delhi. The Swachh Bharat campaign was launched on the occasion of 145th birth anniversary of Mahatma Gandhi and is aimed at making India clean by 2019, i.e. 150th birth anniversary of Mahatma Gandhi.

On the occasion of launch of the campaign in Rajpath New Delhi, Modi administered an oath to a large gathering to keep their neighbourhoods clean. He asked people to donate (Shramdaan) 100 hours every year or two hours every week for cleanliness. After administrating the oath, he himself cleaned a police station and a scavengers’ colony, Valmiki Colony of New Delhi.

He nominated Sachin Tendulkar (retd. cricketer), Sashi Tharoor (Congress leader), Anil Ambani (industrialist), Salman Khan, Priyanka Chopra, Kamal Hasan, Baba Ramdev, Mridula Sinha (Governor of Goa) and the whole team of TV serial Taarak Mehta Ka Ooltah Chashmah. After nominating people for accepting the challenge, he said that each of these nominated people can nominate other nine people of their choice.

6. What is BSBDA?

Under the guidelines issued on August 10, 2012 by RBI: Any individual, including poor or those from weaker section of the society, can open zero balance account in any bank. BSBDA guidelines are applicable to "all scheduled commercial banks in India, including foreign banks having branches in India".

All the accounts opened earlier as 'no-frills' account should be renamed as BSBDA. Banks are required to convert the existing 'no-frills' accounts’ into 'Basic Savings Bank Deposit Accounts'.

 The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service available to all customers, through branches .

 The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial Inclusion objectives.

 7. What is BPS (Basis Points)?

BPS (Basis point) : - BPS is an acronym for basic points  is used to indicate changes in rate of interest and other financial instrument.

1 BASIC POINT IS EQUAL TO 0.01%

So when we say that repo rate has been increased by 25 bps, it means that the rate has been increased by 0.25%

 8. What is KYC?

      The Reserve Bank of India (RBI) has advised banks to follow ‘KYC guidelines’, wherein certain personal information of the account-opening prospect or the customer is obtained. The objective of doing so is to enable the Bank to have positive identification of its customers.  This is also in the interest of customers to safeguard their hard earned money.

      The KYC guidelines of RBI mandate banks to collect three proofs from their customers. They are-

• Photograph                    
• Proof of identity             
• Proof of address

 9. 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.

 10. What is Base Rate?

        It is the minimum rate of interest that a bank is allowed to charge from its customers. Unless mandated by the government, RBI rule stipulates that no bank can offer loans at a rate lower than BR to any of its customers.

      It is effective from, July 1, 2010. However, all existing loans, including home loans and car loans, will continue to be at the current rate. Only the new loans taken on or after July 1 and old loans being renewed after this date will be linked to BR.

11. What is SWIFT?

 SWIFT  :- Society for worldwide Interbank financial tele- communication.

•  India was 74th Nation to join SWIFT Network.

•  SWIFT Code is a standard format of bank Identifier code. This code is used particularly in International transfer of money between banks.

• A majority of FOREX related message are sent to correspondent banks abroad through SWIFT.

• SWIFT Code consist 8 or 11 character when code is 8 digit, It is referred to primary office 4 – bank code

2 – country code

2 – location code

3 – branch code (optional).

 12. What  is Swabhimaan Yojana?

Swabhimaan is a financial inclusion plan of bank to take banking to the door steps of the remote village where banking facility are not available.

 13. What is NOSTRO and VOSTRO account?

NOSTRO Account: A NOSTRO account is maintained by an Indian bank in the foreign countries.

 VOSTRO Account: a vostro a/c is maintained by a foreign bank in India with their corresponding bank.

 14. What is a DeMat Account?

DeMat is nothing but a dematerialized account. If one has to save money or make cheque payments, then he/she needs to open a bank account. Similarly, one needs to open a DeMat account if he/she wants to buy or sell stocks. Thus, DeMat account is similar to a bank account wherein the actual money is being replaced by shares. In order to open a DeMat account, one needs to approach the Depository Participants [DPs].

In India, a DeMat account is a type of banking account that dematerializes paper-based physical stock shares. The DeMat account is used to avoid holding of physical shares: the shares are bought as well as sold through a stock broker. In this case, the advantage is that one does not need any physical evidence for possessing these shares. All the things are taken care of by the DPs.

This account is very popular in India. Physically only 500 shares can be traded as per the provision given by SEBI. From April 2006, it has become mandatory for any person holding a DeMat account to possess a Permanent Account Number (PAN).

 15. What is RuPay Card?

 RuPay is the Indian domestic card payment network set up by National Payments Corporation of India (NPCI) at the behest of banks in India. The RuPay project had been conceived by Indian Banks Association (IBA) and had the approval of Reserve Bank of India (RBI).

 RuPay LogoNational Payments Corporation of India (NPCI) has a plan to provide a full range of card payment services including the RuPay ATM, RuPay MicroATM, Debit, Prepaid and Credit Cards which will be accepted in India and abroad, across various channels like POS, Internet, IVR and mobile etc.

 The initial focus of NPCI would be to approach those banks who have not been issuing any payment card at all more specifically – Regional Rural Banks (RRBs) and urban co-operative banks.

 All Public Sector Undertakings (PSU) banks set to join RuPay system by the end of year 2012. RuPay-based debit cards can be used by the consumers on the Internet from September, 2012.

 The government of India had launched India’s first domestic payment card network, RuPay, to compete with Visa Inc and Mastercard Inc.

 16. What is foreign exchange reservers?

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.

 17. What is Bancassurance ?

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.

18. What is Money Laundering ?

Money laundering is the processes of concealing the source of obtain money. Money or funds obtained through illegal activities are presented as legitimate.

 19. What is the difference between Nationalized bank and Private Bank ?

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.

 20. What are non-perfoming assets?

 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.Also known as "non-performing loan".

 21. What is the Functions of RBI?

The Reserve Bank of India is the central bank of India, was established on April 1,1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.

The Reserve Bank of India was set up on the recommendations of the Hilton Young Commission. The commission submitted its report in the year 1926, though the bank was not set up for nine years.To regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and

generally to operate the currency and credit system of the country to its advantage." Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.Banker to banks: maintains banking accounts of all scheduled banks. 29 What is monetary policy?

A Monetary policy is the process by which the government, central bank, of a country controls

(i) the supply of money,

(ii) availability of money, and

(iii) cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy.

 22. What is SEZ?

SEZ means Special Economic Zone is the one of the part of government’s policies in India. A special Economic zone is a geographical region that economic laws which are more liberal than the usual economic laws in the country. The basic motto behind this is to increase foreign investment, development of infrastructure, job opportunities and increase the income level of the people.

 23. What is SIDBI?

The Small Industries Development Bank of India is a state-run bank aimed to aid the growth and development of micro, small and medium scale industries in India. Set up in 1990 through an act of parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India.

 24. What is TREASURY BILLS (TB)?

Treasury bills (T-Bills) are the short term liabilities of the central government .theoretically government of India issued three types of T-bills through auctions, namely 91 days, 182days,and 364 days. There are no treasury bills issued by state government. Minimum amount of T –Bills is Rs. 25000and in multiple of RS. 25000.T-bills are issued at a discount and are redeemed at par from 1st April 1997 treasury bills have been replaced by WAYS AND MEANS ADVANCES .

25. What is COMMERCIAL PAPER (CP)?

commercial paper was introduced by RBI in 1991. It is a short term money market instrument issued in the form of promissory note .Corporate; primary dealers and the all India financial institution are eligible to issue CP. The maturity period of each commercial paper is 7days to 1year from the date of issue .CP can be issued denominations of Rs. 5lakh or multiples thereof. Only a schedule bank can act as an issuing and paying agent (IPA) for issuance of CP.

 26. What is CRM?

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.

 27. What is Right to information Act?

The Right to Information act is a law enacted by the Parliament of India giving citizens of India access to records of the Central Government and State governments. The Act applies to all States and Union Territories of India, except the State of Jammu and Kashmir - which is covered under a State-level law. This law was passed by Parliament on 15 June 2005 and came fully into force on 13 October 2005.

 28.  What is Recession?

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.

 29. What is dematerialization ?

Dematerialization 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.

 30. What is Derivative ?

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.

 31. What is LAF ?

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

 32.  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

 33. 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.

 34. 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.

 35. 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 that it extends to commercial banks and other financial intermediaries. Changes in the bank rate are often used by central banks to control the money supply.

 36. What is PLR?

The Prime Interest Rate is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers). The rate is almost always the same amongst major banks. Adjustments to the prime rate are made by banks at the same time; although, the prime rate

does not adjust on any regular basis. The Prime Rate is usually adjusted at the same time and in correlation to the adjustments of the Fed Funds Rate. The rates reported below are based upon the prime rates on the first day of each respective month. Some banks use the name "Reference Rate" or "Base Lending Rate" to refer to their Prime Lending Rate.

 37. what is Bitcoin?

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

 38.  What is SLR Rate?

SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth.

Through SLR rate tuning the money supply in the system can be controlled efficiently.

 39. What is Deposit Rate?

Interest Rates paid by a depository institution on the cash on deposit.

 40. What is Fiscal Policy?

Fiscal policy is the use of government spending and revenue collection to influence the economy. These policies affect tax rates, interest rates and government spending, in an effort to control the economy. Fiscal policy is an additional method to determine public revenue and public expenditure.

 41. What is the Banking Ombudsman Scheme?

The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.

 42. Which are the banks covered under the Banking Ombudsman Scheme, 2006?

All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.

 43.  What is Inflation?

Inflation is as an increase in the price of bunch of Goods and services that projects the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services. Inflation happens when there are fewer Goods and more buyers; this will result in increase in the price of Goods, since there is more demand and less supply of the goods.

 44. What is Deflation?

Deflation is the continuous decrease in prices of goods and services. Deflation occurs when the inflation rate becomes negative (below zero) and stays there for a longer period.

 45. What is FII?

FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of an institution. An institution established outside India, which proposes to invest in Indian market, in other words buying Indian stocks. FII's generally buy in large volumes which has an impact on the stock markets. Institutional Investors includes pension funds, mutual funds, Insurance Companies, Banks, etc.

 46. What is FDI?

FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control” (Or) A foreign company having a stake in a Indian Company.

 47.  What is IPO?

IPO is Initial Public Offering. This is the first offering of shares to the general public from a company wishes to list on the stock exchanges.

 48. What is GDP?

The Gross Domestic Product or GDP is a measure of all of the services and goods produced in a country over a specific period; classically a year.

 49. What is GNP?

Gross National Product is measured as GDP plus income of residents from investments made abroad minus income earned by foreigners in domestic market.

 50. What is Revenue deficit?

It defines that, where the net amount received (by taxes & other forms) fails to meet the predicted net amount to be received by the government.

51. What is Disinvestment?

The Selling of the government stake in public sector undertakings.

 52. What is Fiscal Deficit?

It is the difference between the government’s total receipts (excluding borrowings) and total expenditure.

 53. What is National Income?

National Income is the money value of all goods and services produced in a Country during the year.

 54.  What is bank and its features and types?

A bank is a financial organization where people deposit their money to keep it safe.Banks play an important role in the financial system and the economy. As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner.

 55. What are Mutual funds?

Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually. A company that invests its clients' pooled fund into securities that match its declared financial objectives. Asset management companies provide investors with more diversification and investing options than they would have by themselves. Mutual funds, hedge funds and pension plans are all run by asset management companies.

These companies earn income by charging service fees to their clients.

 56. What is Cheque?

Cheque is a negotiable instrument instructing a Bank to pay a specific amount from a specified account held in the maker/depositor's name with that Bank. A bill of exchange drawn on a specified banker and payable on demand.“Written order directing a bank to pay money”.

 57. What is demand Draft?

A demand draft is an instrument used for effecting transfer of money. It is a Negotiable Instrument. Cheque and Demand-Draft both are used for Transfer of money. You can 100% trust a DD. It is a banker's check. A check may be dishonored for lack of funds a DD can not. Cheque is written by an individual and Demand draft is issued by a bank. People believe banks more than individuals.

 58. What is NABARD?

NABARD was established by an act of Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981. It replaced  the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). It is one of the premiere agency to provide credit in rural areas. NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.

 59.  What is SENSEX and NIFTY?

SENSEX is the short term for the words "Sensitive Index" and is associated with the Bombay (Mumbai) Stock Exchange (BSE). The SENSEX was first formed on 1-1-1986 and used the market capitalization of the 30 most traded stocks of BSE.

Where as NSE has 50 most traded stocks of NSE.SENSEX IS THE INDEX OF BSE. AND NIFTY IS THE INDEX OF NSE.BOTH WILL SHOW DAILY

TRADING MARKS. Sensex and Nifty both are an "index”. An index is basically an indicator it indicates whether most of the stocks have gone up or most of the stocks have gone down.

 60. What is SEBI?

SEBI is the regulator for the Securities Market in India. Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave.

61 . 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.

 62. NBFCs are doing functions similar to banks. What is difference between banks & NBFCs ?

NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:

• NBFC cannot accept demand deposits;
• NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
• deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of bank

63. What is SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI)?
• SIDBI, as a subsidiary of IDBI, commenced its operations from April 2, 1990. (Act passed in Oct 1989)
• ts headquarters is at Lucknow.
• Main objective: to ensure larger flow of financial and non-financial assistance to the small scale sector.
•
• Thrust on
• Initiating steps for technological up gradation and modernization of existing units.
• Expanding the channels for marketing the products of SSI Sector in domestic and overseas market.
• Promotion of employment oriented industries especially in semi urban areas to create more employment opportunities
• Major Activities: Refinance of loan and advances, discounting and rediscounting of bills, extension of seed capital/soft loans, granting direct assistance, providing services like factoring, leasing and so on. 

64. What is SELF HELP GROUP?
Self help group is a small volunteer association of poor people preferably from the same socio Economic background. They come together for the purpose of solving their common problems through self help and mutual help. The self help group promotes small saving among the members. The savings are kept with the Bank. This common fund is in the name of SHG. Usually the number of members in one SHG doesn’t exceed 20. The NABARD and NGOs the promoters of this group.

65.What is  KISAN CREDIT CARD?
Provision timely and adequate credit has one of the major challenges for Banks in India in dispension of agriculture and rural credit to the farmers in order to achieve the AIM. KCC are now a new concept in the field of agriculture banking in India. The KCC scheme was started by the GOI in conciliation with the RBI and NABARD in 1998-99. The eligibility criteria for KCC is the borrower must be with a good track record of the 2 years would be the prime customer and a farmer who has the operational land holding certificate from the PATWARI. The maximum amount of KCC is up to Rs. 10000 and each withdrawal to be paid within 12 months and KCC is valid for 3 years subject to annual renewal. All branches engaged in agriculture banking could issue KCC. In very special conditions Bank can provide up to Rs. 25000 loan and the interest rate on KCC is 11%. 

66. What is Debit card, credit card, smart card, visa card and master card?
Debit Card is also known as gift card. It is a type of plastic money which provides an alternative payment method for cash withdrawals through automated tailor machine and this is a prepaid ATM card.
CREDIT CARD
A Credit Card allows you to borrow money when you purchases. It doesn’t directly debit from your bank account at the time of purchase instead you are sent a bill every month for the sum of total of your purchase. In other words this Post Paid Money Card.
SMART CARD
A Smart Card or chip card or integrated circuit card is defined as a pocket sized card with embedded integrated circuit which can process information. This is a card with all personal information of any individual in financial and Money Market.
MASTER CARD
Master Card international is a multinational corporation based in purchase throughout the world. Its principal business is to process payment between bank of merchants and the bank of purchase that used its master card I.E. Master Card is a service provider company Master Card international incorporated has been a publicity traded company since 2006 with the brand name Master Card. All financial institutions in banks are the member of this Master Card international for service providing except bank of America. Bank of America has its own service proving company named as VISA international.
VISA CARD
Visa Card is a type of debit card on Visa network. It has VISA logo and can be accepted to pay for the things and the money is drawn directly from your account. These are the debit cards, which are subject to a daily limit, and/or a maximum limit equal to the current/checking account balance from which it draws funds.


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What is interview?

An interview is a conversation between two or more people where questions are asked by the interviewer to elicit facts or statements from the interviewee.

Bank interview questions are meant to measure the attitude, skill and adjust ability of the candidate , to draw a conclusion on his/her suitability in the bank.

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Common Tips for All bank Interviews 


 Do’s and Don’ts during interview

-Reach interview venue on time.

-Make yourself calm and comfortable while you are waiting outside

-When your interview call comes knock he door softly and take permission of the board for entry like-

-Sir… Please may I come in. When interviewer say come in , say thank you after permission.

-Softly close the door and wish the board with gentle standing posture.

-If there is any Female in board, then wish her first.

-Remember time carefully and wish accordingly Good morning, good afternoon or good evening.

-Before 12 o’clock- Good Morning

-Between 12-4 Good afternoon

-After Pm- Good evening

-Wait till board asks/permits you to sit and say thanks before sitting.

-Sit in straight posture with hands in your lap/thigh. Avoid fidgeting and slouching

-Make your eye contact with the board

-Voice must be Clear/Audible/Humble and polite.

-Give answers confidently.

-Be positive, honest and be yourself

-Always say thank you sir when board informs/ corrects you any where.

-When you are unable to answer any question say-

-Sorry sir I do not know

- Sir I have heard about it but I am unable to recall at the movement, sorry sir.

-When board say thanks your interview is over-

-Thank you sir.. Have a nice day(before 4 PM)
- Take care of voice modulation.

Don’ts

-Don’t make excuses. Take responsibility for your decisions and your actions.

-Do not make negative comments about your previous employer.

-Donot treat the interview casually , as if you are just shopping around or doing the interview for practice.

-Donot give impression that you are interested in particular location only and not talk about salary and perks until the subject brought by interviewer.

- Don't assume that female interviewer is Mrs. or Miss. Address her as madam unless told otherwise.

 - Don't smoke before interview or chew gum during interview.

- Don't allow your cell phone to ring during interview.(if it does, apologize quickly and ignore it)  

- Avoid hand movement

- Avoid looking up and down.

- Avoid hiding eyes it shows lack of confidence.

- Don't forget to wish the board.

- Don't sit untill the board asks to do so.

-Never put your file or hand on table.
- Don't show irritation while board ask questions.
- Do not try to defend yourself in wrong answers.
- Do not make noise while sitting and leaving the chair.
- Never ask questions to the Board.

Interview Attire or Dress up

 For Male candidates-
Trouser- Do not wear Jeans during interview. Trouser should be formal one not stylist one.
Shirts- Full sleeve shirts, even in summer. Choose white or light stripes
Ties- Select good quality tie. avoid fashion extremes.
Socks- Dark socks , mid calf length so no skin is visible when you sit down.
Shoes- Leather, lace-up preferably Black. well polished
Belt- Black leather, to match your shoes.
Facial hair- Well groomed. Take pocket comb along with you on interview day, before entering in room groom it properly.
Clothes should be clean and well ironed.

For Female Candidates-
Suit- wear a two - piece matched suit.
Cosmetics- Keep makeup conservative. Avoid extremes of nail length and polish color, especially in conservative industries.
Shoes- Should be leather or fabric. Choose closed - toe pumps. Make certain you can walk comfortably in your shoes; hobbing in uncomfortable shoes does not convey a professional appearance.
Hosiery- Should be plainly styled (no patterns), sheer (not opaque) and in neutral colors complementing your suit.
Purse/Bag- If you carry a purse, keep it small and simple, purse color should coordinate with your shoes.

Grooming Tips for Everyone

Hair- Should be clean and neat
Shoes- Should be in polished condition. Make sure heels are not worn.
Details- No missing buttons, no lint, and donot forget to remove external tags and tacking stitches from new clothes.
Hands- Clean Fingernails
Fit- Clothes should be clean, neatly ironed and fit properly
Smell- Perfume or cologne should be used sparingly or not at all. No odors in clothes. Donot smell like having smoked.

Interviews start with a personal question like - introduce yourself or tell us something about you. Also, during interview, interviewers focus on knowing the personality traits of the individual. As these questions are related to you only, you can thoroughly prepare them in advance. This requires a  indepth self analysis of yourself and build a good story around you. After looking at your achievements, you can chose to form a story which covers your achievement and hardships or something which shows you in a positive light. Some of the personality related questions, which you must prepare are -

1. Tell us something about yourself?

In this section interviewer focus on following areas-

1.  Personal- Meaning of your name, family background, about the city you belong(its history, founder, famous places, economy, surroundings etc.), Date of birth( importance of day, any famous person born on that day).

2.Academics- Questions must be focused on your subjects that you study in graduation

 If you have gap more than 2 years then you must be ready to fill this gap with logical reason. 

If marks are decreasing order, then give appropriate reason

If science field then give reason why you opt for banking?

Whats the use of your subject in banking?

3.  Hobbies- You must be perfect in his/her hobbies. Board can ask any question related with your hobby . So tell hobby cautiously.

4.  Job nature- In this interviewer ask various questions related with banking terms and other banking and finance knowledge.

5. Current News- Every candidate is advised to read newspaper regualarly for a whole month before your interview and analysis the news and discuss with friends.

 Sample

1. When interviewer ask you about yourself starts like that- Sir, I am …your name…….. . I have  Done…… Qualification………….. My hobbies are………… In my family ……. No. of members.  My father is ………. And mother ………….(Father and mother profession).We are ……… no. of brother and sister.

If you have working experience then mention your experience after your qualification.

2. Strength and weakness- that you told should be according to your personality.

3.When they ask why you want to join Bank?- Reply like that- I want to join bank because banking is a very fast growing sector which provide me aple growth  opportunity  .
1) Banking Sector offers tremendous growth opportunities. Candidates reach from Trainee Officer level to a General Manager level.
2) Bank Employees have respect in society, since there is direct interaction with the customers.
3) One of the maojor reason is Job security, especially with Public Sector Banks.
4) Banks provide a challenging working environment, anyone who loves to achieve work goals will definitely like a banking job.

Banking sector is a sunrise sector of Indian economy. It is one of the fastest growing sector as banks are expanding their reach across the geography. As probationary Officer role is a multi-dimensional role, it offers unparalleled opportunities for learning and growth. Many of the chairman of the PSU banks had joined the bank as Probationary officers only.

Questions related with Banking Terms

1.     what is bank?

A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customers with capital surpluses. 

2. What is the difference between Cheque and Demand Draft?

Cheque: Cheuqe is a negotiable instrument instructing a bank to pay a specific amount from a specific account held in the maker/depositor name with that Bank.

 Demand Draft: A demand draft is an instrument used for effecting transfer of money. It is a negotiable instrument.

 3. What is a Non-Banking Financial Company (NBFC)?

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).

 4. What is Pradhan Mantri Jan dhan Yojna?

Pradhan Mantri Jan Dhan Yojana

The government rolled out its ambitious financial inclusion programme, the Pradhan Mantri Jan Dhan Yojana (PMJDY)

The programme is Prime Minister Narendra Modi's first blockbuster social upliftment scheme and is aimed at improving the lives of millions of India's poor by bringing them into the financial mainstream and freeing them from the clutches of usurious moneylenders, while giving them a modicum of insurance cover.

 The slogan for the Pradhanmantri Jan Dhan mission is expected to be ” Mera Khata – Bhagya Vidhaata” which when translated into English means ” My Bank Account – The Creator of the Good Fortune”:

Benefits under Yojana

Every individual who open a bank account becomes eligible to receive an accident insurance cover of up-to 1 Lakh rupees for his entire family.

Moreover, an additional 30000 rupees life insurance cover will be provided for those opening bank accounts before 26 January 2015.

Once the bank account became active for 6 months and being linked to account holders Aadhar identity, they would become eligible for an overdraft of up to 2500 rupees, which would further be enhanced by the bank to 5000 rupees over time.

The Jan Dhan Yojana also seeks to provide incentives to business and banking correspondents. The banking correspondents act as link for the last mile between savings account holders and the bank by fixing a minimum monthly remuneration of 5000 rupees.

The long term vision of the Jan Dhan Yojana is to lay the foundation of a cashless economy and is complementary to the Digital India Scheme.

Accidental Insurance given by- HDFC ergo

Life Insurance by- LIC

5. What is Swachh Bharat (Clean India) campaign?

Prime Minister Narendra Modi on 2 October 2014 launched Swachh Bharat (Clean India) campaign in New Delhi. The Swachh Bharat campaign was launched on the occasion of 145th birth anniversary of Mahatma Gandhi and is aimed at making India clean by 2019, i.e. 150th birth anniversary of Mahatma Gandhi.

On the occasion of launch of the campaign in Rajpath New Delhi, Modi administered an oath to a large gathering to keep their neighbourhoods clean. He asked people to donate (Shramdaan) 100 hours every year or two hours every week for cleanliness. After administrating the oath, he himself cleaned a police station and a scavengers’ colony, Valmiki Colony of New Delhi.

He nominated Sachin Tendulkar (retd. cricketer), Sashi Tharoor (Congress leader), Anil Ambani (industrialist), Salman Khan, Priyanka Chopra, Kamal Hasan, Baba Ramdev, Mridula Sinha (Governor of Goa) and the whole team of TV serial Taarak Mehta Ka Ooltah Chashmah. After nominating people for accepting the challenge, he said that each of these nominated people can nominate other nine people of their choice.

6. What is BSBDA?

Under the guidelines issued on August 10, 2012 by RBI: Any individual, including poor or those from weaker section of the society, can open zero balance account in any bank. BSBDA guidelines are applicable to "all scheduled commercial banks in India, including foreign banks having branches in India".

All the accounts opened earlier as 'no-frills' account should be renamed as BSBDA. Banks are required to convert the existing 'no-frills' accounts’ into 'Basic Savings Bank Deposit Accounts'.

 The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service available to all customers, through branches .

 The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial Inclusion objectives.

 7. What is BPS (Basis Points)?

BPS (Basis point) : - BPS is an acronym for basic points  is used to indicate changes in rate of interest and other financial instrument.

1 BASIC POINT IS EQUAL TO 0.01%

So when we say that repo rate has been increased by 25 bps, it means that the rate has been increased by 0.25%

 8. What is KYC?

      The Reserve Bank of India (RBI) has advised banks to follow ‘KYC guidelines’, wherein certain personal information of the account-opening prospect or the customer is obtained. The objective of doing so is to enable the Bank to have positive identification of its customers.  This is also in the interest of customers to safeguard their hard earned money.

      The KYC guidelines of RBI mandate banks to collect three proofs from their customers. They are-

• Photograph                    
• Proof of identity             
• Proof of address

 9. 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.

 10. What is Base Rate?

        It is the minimum rate of interest that a bank is allowed to charge from its customers. Unless mandated by the government, RBI rule stipulates that no bank can offer loans at a rate lower than BR to any of its customers.

      It is effective from, July 1, 2010. However, all existing loans, including home loans and car loans, will continue to be at the current rate. Only the new loans taken on or after July 1 and old loans being renewed after this date will be linked to BR.

11. What is SWIFT?

 SWIFT  :- Society for worldwide Interbank financial tele- communication.

•  India was 74th Nation to join SWIFT Network.

•  SWIFT Code is a standard format of bank Identifier code. This code is used particularly in International transfer of money between banks.

• A majority of FOREX related message are sent to correspondent banks abroad through SWIFT.

• SWIFT Code consist 8 or 11 character when code is 8 digit, It is referred to primary office 4 – bank code

2 – country code

2 – location code

3 – branch code (optional).

 12. What  is Swabhimaan Yojana?

Swabhimaan is a financial inclusion plan of bank to take banking to the door steps of the remote village where banking facility are not available.

 13. What is NOSTRO and VOSTRO account?

NOSTRO Account: A NOSTRO account is maintained by an Indian bank in the foreign countries.

 VOSTRO Account: a vostro a/c is maintained by a foreign bank in India with their corresponding bank.

 14. What is a DeMat Account?

DeMat is nothing but a dematerialized account. If one has to save money or make cheque payments, then he/she needs to open a bank account. Similarly, one needs to open a DeMat account if he/she wants to buy or sell stocks. Thus, DeMat account is similar to a bank account wherein the actual money is being replaced by shares. In order to open a DeMat account, one needs to approach the Depository Participants [DPs].

In India, a DeMat account is a type of banking account that dematerializes paper-based physical stock shares. The DeMat account is used to avoid holding of physical shares: the shares are bought as well as sold through a stock broker. In this case, the advantage is that one does not need any physical evidence for possessing these shares. All the things are taken care of by the DPs.

This account is very popular in India. Physically only 500 shares can be traded as per the provision given by SEBI. From April 2006, it has become mandatory for any person holding a DeMat account to possess a Permanent Account Number (PAN).

 15. What is RuPay Card?

 RuPay is the Indian domestic card payment network set up by National Payments Corporation of India (NPCI) at the behest of banks in India. The RuPay project had been conceived by Indian Banks Association (IBA) and had the approval of Reserve Bank of India (RBI).

 RuPay LogoNational Payments Corporation of India (NPCI) has a plan to provide a full range of card payment services including the RuPay ATM, RuPay MicroATM, Debit, Prepaid and Credit Cards which will be accepted in India and abroad, across various channels like POS, Internet, IVR and mobile etc.

 The initial focus of NPCI would be to approach those banks who have not been issuing any payment card at all more specifically – Regional Rural Banks (RRBs) and urban co-operative banks.

 All Public Sector Undertakings (PSU) banks set to join RuPay system by the end of year 2012. RuPay-based debit cards can be used by the consumers on the Internet from September, 2012.

 The government of India had launched India’s first domestic payment card network, RuPay, to compete with Visa Inc and Mastercard Inc.

 16. What is foreign exchange reservers?

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.

 17. What is Bancassurance ?

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.

18. What is Money Laundering ?

Money laundering is the processes of concealing the source of obtain money. Money or funds obtained through illegal activities are presented as legitimate.

 19. What is the difference between Nationalized bank and Private Bank ?

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.

 20. What are non-perfoming assets?

 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.Also known as "non-performing loan".

 21. What is the Functions of RBI?

The Reserve Bank of India is the central bank of India, was established on April 1,1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.

The Reserve Bank of India was set up on the recommendations of the Hilton Young Commission. The commission submitted its report in the year 1926, though the bank was not set up for nine years.To regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and

generally to operate the currency and credit system of the country to its advantage." Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.Banker to banks: maintains banking accounts of all scheduled banks. 29 What is monetary policy?

A Monetary policy is the process by which the government, central bank, of a country controls

(i) the supply of money,

(ii) availability of money, and

(iii) cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy.

 22. What is SEZ?

SEZ means Special Economic Zone is the one of the part of government’s policies in India. A special Economic zone is a geographical region that economic laws which are more liberal than the usual economic laws in the country. The basic motto behind this is to increase foreign investment, development of infrastructure, job opportunities and increase the income level of the people.

 23. What is SIDBI?

The Small Industries Development Bank of India is a state-run bank aimed to aid the growth and development of micro, small and medium scale industries in India. Set up in 1990 through an act of parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India.

 24. What is TREASURY BILLS (TB)?

Treasury bills (T-Bills) are the short term liabilities of the central government .theoretically government of India issued three types of T-bills through auctions, namely 91 days, 182days,and 364 days. There are no treasury bills issued by state government. Minimum amount of T –Bills is Rs. 25000and in multiple of RS. 25000.T-bills are issued at a discount and are redeemed at par from 1st April 1997 treasury bills have been replaced by WAYS AND MEANS ADVANCES .

25. What is COMMERCIAL PAPER (CP)?

commercial paper was introduced by RBI in 1991. It is a short term money market instrument issued in the form of promissory note .Corporate; primary dealers and the all India financial institution are eligible to issue CP. The maturity period of each commercial paper is 7days to 1year from the date of issue .CP can be issued denominations of Rs. 5lakh or multiples thereof. Only a schedule bank can act as an issuing and paying agent (IPA) for issuance of CP.

 26. What is CRM?

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.

 27. What is Right to information Act?

The Right to Information act is a law enacted by the Parliament of India giving citizens of India access to records of the Central Government and State governments. The Act applies to all States and Union Territories of India, except the State of Jammu and Kashmir - which is covered under a State-level law. This law was passed by Parliament on 15 June 2005 and came fully into force on 13 October 2005.

 28.  What is Recession?

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.

 29. What is dematerialization ?

Dematerialization 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.

 30. What is Derivative ?

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.

 31. What is LAF ?

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

 32.  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

 33. 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.

 34. 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.

 35. 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 that it extends to commercial banks and other financial intermediaries. Changes in the bank rate are often used by central banks to control the money supply.

 36. What is PLR?

The Prime Interest Rate is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers). The rate is almost always the same amongst major banks. Adjustments to the prime rate are made by banks at the same time; although, the prime rate

does not adjust on any regular basis. The Prime Rate is usually adjusted at the same time and in correlation to the adjustments of the Fed Funds Rate. The rates reported below are based upon the prime rates on the first day of each respective month. Some banks use the name "Reference Rate" or "Base Lending Rate" to refer to their Prime Lending Rate.

 37. what is Bitcoin?

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

 38.  What is SLR Rate?

SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers. SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit. SLR is determined as the percentage of total demand and percentage of time liabilities. Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand. SLR is used to control inflation and propel growth.

Through SLR rate tuning the money supply in the system can be controlled efficiently.

 39. What is Deposit Rate?

Interest Rates paid by a depository institution on the cash on deposit.

 40. What is Fiscal Policy?

Fiscal policy is the use of government spending and revenue collection to influence the economy. These policies affect tax rates, interest rates and government spending, in an effort to control the economy. Fiscal policy is an additional method to determine public revenue and public expenditure.

 41. What is the Banking Ombudsman Scheme?

The Banking Ombudsman Scheme enables an expeditious and inexpensive forum to bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.

 42. Which are the banks covered under the Banking Ombudsman Scheme, 2006?

All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.

 43.  What is Inflation?

Inflation is as an increase in the price of bunch of Goods and services that projects the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services. Inflation happens when there are fewer Goods and more buyers; this will result in increase in the price of Goods, since there is more demand and less supply of the goods.

 44. What is Deflation?

Deflation is the continuous decrease in prices of goods and services. Deflation occurs when the inflation rate becomes negative (below zero) and stays there for a longer period.

 45. What is FII?

FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of an institution. An institution established outside India, which proposes to invest in Indian market, in other words buying Indian stocks. FII's generally buy in large volumes which has an impact on the stock markets. Institutional Investors includes pension funds, mutual funds, Insurance Companies, Banks, etc.

 46. What is FDI?

FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control” (Or) A foreign company having a stake in a Indian Company.

 47.  What is IPO?

IPO is Initial Public Offering. This is the first offering of shares to the general public from a company wishes to list on the stock exchanges.

 48. What is GDP?

The Gross Domestic Product or GDP is a measure of all of the services and goods produced in a country over a specific period; classically a year.

 49. What is GNP?

Gross National Product is measured as GDP plus income of residents from investments made abroad minus income earned by foreigners in domestic market.

 50. What is Revenue deficit?

It defines that, where the net amount received (by taxes & other forms) fails to meet the predicted net amount to be received by the government.

51. What is Disinvestment?

The Selling of the government stake in public sector undertakings.

 52. What is Fiscal Deficit?

It is the difference between the government’s total receipts (excluding borrowings) and total expenditure.

 53. What is National Income?

National Income is the money value of all goods and services produced in a Country during the year.

 54.  What is bank and its features and types?

A bank is a financial organization where people deposit their money to keep it safe.Banks play an important role in the financial system and the economy. As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner.

 55. What are Mutual funds?

Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually. A company that invests its clients' pooled fund into securities that match its declared financial objectives. Asset management companies provide investors with more diversification and investing options than they would have by themselves. Mutual funds, hedge funds and pension plans are all run by asset management companies.

These companies earn income by charging service fees to their clients.

 56. What is Cheque?

Cheque is a negotiable instrument instructing a Bank to pay a specific amount from a specified account held in the maker/depositor's name with that Bank. A bill of exchange drawn on a specified banker and payable on demand.“Written order directing a bank to pay money”.

 57. What is demand Draft?

A demand draft is an instrument used for effecting transfer of money. It is a Negotiable Instrument. Cheque and Demand-Draft both are used for Transfer of money. You can 100% trust a DD. It is a banker's check. A check may be dishonored for lack of funds a DD can not. Cheque is written by an individual and Demand draft is issued by a bank. People believe banks more than individuals.

 58. What is NABARD?

NABARD was established by an act of Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981. It replaced  the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell (RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC). It is one of the premiere agency to provide credit in rural areas. NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.

 59.  What is SENSEX and NIFTY?

SENSEX is the short term for the words "Sensitive Index" and is associated with the Bombay (Mumbai) Stock Exchange (BSE). The SENSEX was first formed on 1-1-1986 and used the market capitalization of the 30 most traded stocks of BSE.

Where as NSE has 50 most traded stocks of NSE.SENSEX IS THE INDEX OF BSE. AND NIFTY IS THE INDEX OF NSE.BOTH WILL SHOW DAILY

TRADING MARKS. Sensex and Nifty both are an "index”. An index is basically an indicator it indicates whether most of the stocks have gone up or most of the stocks have gone down.

 60. What is SEBI?

SEBI is the regulator for the Securities Market in India. Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave.

61 . 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.

 62. NBFCs are doing functions similar to banks. What is difference between banks & NBFCs ?

NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:

• NBFC cannot accept demand deposits;
• NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
• deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of bank

63. What is SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI)?
• SIDBI, as a subsidiary of IDBI, commenced its operations from April 2, 1990. (Act passed in Oct 1989)
• ts headquarters is at Lucknow.
• Main objective: to ensure larger flow of financial and non-financial assistance to the small scale sector.
•
• Thrust on
• Initiating steps for technological up gradation and modernization of existing units.
• Expanding the channels for marketing the products of SSI Sector in domestic and overseas market.
• Promotion of employment oriented industries especially in semi urban areas to create more employment opportunities
• Major Activities: Refinance of loan and advances, discounting and rediscounting of bills, extension of seed capital/soft loans, granting direct assistance, providing services like factoring, leasing and so on. 

64. What is SELF HELP GROUP?
Self help group is a small volunteer association of poor people preferably from the same socio Economic background. They come together for the purpose of solving their common problems through self help and mutual help. The self help group promotes small saving among the members. The savings are kept with the Bank. This common fund is in the name of SHG. Usually the number of members in one SHG doesn’t exceed 20. The NABARD and NGOs the promoters of this group.

65.What is  KISAN CREDIT CARD?
Provision timely and adequate credit has one of the major challenges for Banks in India in dispension of agriculture and rural credit to the farmers in order to achieve the AIM. KCC are now a new concept in the field of agriculture banking in India. The KCC scheme was started by the GOI in conciliation with the RBI and NABARD in 1998-99. The eligibility criteria for KCC is the borrower must be with a good track record of the 2 years would be the prime customer and a farmer who has the operational land holding certificate from the PATWARI. The maximum amount of KCC is up to Rs. 10000 and each withdrawal to be paid within 12 months and KCC is valid for 3 years subject to annual renewal. All branches engaged in agriculture banking could issue KCC. In very special conditions Bank can provide up to Rs. 25000 loan and the interest rate on KCC is 11%. 

66. What is Debit card, credit card, smart card, visa card and master card?
Debit Card is also known as gift card. It is a type of plastic money which provides an alternative payment method for cash withdrawals through automated tailor machine and this is a prepaid ATM card.
CREDIT CARD
A Credit Card allows you to borrow money when you purchases. It doesn’t directly debit from your bank account at the time of purchase instead you are sent a bill every month for the sum of total of your purchase. In other words this Post Paid Money Card.
SMART CARD
A Smart Card or chip card or integrated circuit card is defined as a pocket sized card with embedded integrated circuit which can process information. This is a card with all personal information of any individual in financial and Money Market.
MASTER CARD
Master Card international is a multinational corporation based in purchase throughout the world. Its principal business is to process payment between bank of merchants and the bank of purchase that used its master card I.E. Master Card is a service provider company Master Card international incorporated has been a publicity traded company since 2006 with the brand name Master Card. All financial institutions in banks are the member of this Master Card international for service providing except bank of America. Bank of America has its own service proving company named as VISA international.
VISA CARD
Visa Card is a type of debit card on Visa network. It has VISA logo and can be accepted to pay for the things and the money is drawn directly from your account. These are the debit cards, which are subject to a daily limit, and/or a maximum limit equal to the current/checking account balance from which it draws funds.


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