BANK INTERVIEW MATERIAL WITH SUGGESTED ANSWERS

I received this material from another helpful candidate.  Please read this for interview and also for banking related general awareness .

Duties of P.O

Passing checks.
Making or authorizing demand drafts or NEFT RTGS.
Authorizing cash payment receipts.
Handling Out station checks.
Taking printouts of EOD reports... I.e. end of day reports.
Doing KYC.
Funds transfer.. I.e. same bank money transfer.
Issuing checkbook.
ATM cards.
Issuing net banking.mobile banking or SMS alerts.
Making or authorizing Term deposits.
Cash tallying...
Handling vault keys.
Taking care of lockers.
And in case of southern posting...especially in small towns...
Handling gold loans.

Computer science useful in banking industry

There has been a significant change in attitude and the Indian banking industry is well on the road to using the full potential of computers and communications technology

I called earlier, advanced ledger posting machines.  These systems were designed to take care of the accounts related functions of the banks which were at the heart of banking operations and which had assumed great significance in terms of the need for accuracy and control.

Second, the next progress was towards branch automation.  This enabled setting up of “Single Window Service” facilities which were focused on the customers.

Third, there was the emergence of network based operations which were aimed at providing interbank connectivity

Fourth, an important stage in the evolution of the user friendly technology arrived with the deployment of ATMs and the adoption of Core Banking Solution which radically 7 transformed the way banking was done in India both by bankers and customers.

Innovations in newer delivery channels like internet banking, mobile banking and pre-paid cards issued by non-banking entities emerged.  India also became a member of the Basel Committee of Payment Settlement systems.

For the customers, the important benefits are anywhere banking, Internet banking, ATM banking and Mobile banking.  It has also facilitated the use of secured debit and credit cards.  For  the banks, the major benefits are centralization of customer information, centralized transaction process, 9centralized accounting process, basic MIS reporting and real time information availability.
.

*what you observe there ? FERA & FEMA

 Foreign Exchange Management Act(FEMA) was an act passed in the winter session of Parliament in 1999 which replaced Foreign Exchange Regulation Act. This act seeks to make offenses related to foreign exchange civil offenses. It extends to the whole of India.

Activities such as payments made to any person outside India or receipts from them, along with the deals in foreign exchange and foreign security is restricted. It is FEMA that gives the central government the power to impose the restrictions.

- Restrictions are imposed on people living in India who carry out transactions in foreign exchange, foreign security or who own or hold immovable property abroad.

- Without general or specific permission of the Reserve Bank of India, FEMA restricts the transactions involving foreign exchange or foreign security and payments from outside the country to India – the transactions should be made only through an authorized person.

NATIONAL INCOME:

National income is defined as the total value of all the goods and services produced within a country plus income coming from abroad in a particular time period usually 1 year.

A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including 

gross domestic product (GDP),

gross national product (GNP), and 

net national income (NNI).

23.What are the qualities a po must have?

the good qualities of a probationary officer is first of all to be receptive and alert towards all that is happening in the bank and outside and also to the training being imparted. He should also be cooperative and friendly towards the staff and also towards the customer. He also needs to 

develop a humane and intelligent kind of leadership, communication, and authority u responsibility and accountability related aspects. In short he should be having an attractive sincere and industrious personality

*****29.If many people are standing in queue and a valued customer comes whose deposit is 10lakh how can you handle?

Services of bank:

·  Issuing of debit and credit cards

·  m-banking and e-banking

·  selling of mutual funds

·  selling of insurance products

·  developing rural banking

33. If you get fradulent money during cash deposit of customer how will you react?

34. Can you explain how using social networking site you can improve banking services?

35. Why should we select you over other interview aspirant? What benefit you give us so that we will select you?

* Why the banks were nationalized Mr. X?

Sir, private banks were nationalized way back in 1969 and six more in 1980. The purpose was to make them work more in accordance with national priorities of development of agriculture and industry by making advances liberally in these sectors instead of concentrating on making more and more profits

:

Did it make a difference?

Yes, certainly Sir. If India's agriculture and industry have developed over the years, some credit must go to the nationalized, banks for contributing capital in the shape of timely finance for buying inputs, raw materials and introducing latest technology.

But supposing you are not selected?

Well, Sir I am quite confident of being selected but if, unfortunately i am not able to make it this year, I will try again next year with more hard work and even better preparation.

What changes do you think have come about in banking during the last two decades or so?

Sir, banking has undergone great changes during the last twenty years· or so. Most of these changes have to do with the application of new technology. Now all transactions are done through computers: debit, credit, issuing drafts, fixed deposit receipts, issuing account statements, completing pass books, applying interest on accounts, etc. all have become easy, accurate and quick with technology. Even we have note-counting machines now.

1. What is the role of public sector organization?

·  Maximizing the rate of economic growth

·  Development of capital-intensive

·  Development of agriculture 

·  Increasing employment opportunities

·  Export promotion

·  Mobilization of resources

·  Research and development

What is a Bank?

Bank is a financial institution which deals in various kinds of financial activities like Lending, (Accepting deposits in saving a/c, Current a/c, Recurring deposit a/c, Fixed deposit a/c), Foreign Exchange activities as Authorized Dealers (AD) of Category-1, Corporate Finance, Banccasurance, Online Trading (Dmet), Debt Restructuring, Financial Inclusion and others....

What is Foreign Exchange Reserve?

Foreign Exchange Reserve includes Factor Income, Foreign Currency Stock of most tradable currencies like USD and GBP, Reserve with IMF in the form of SDRs (Special Drawing Rights), Gold Reserves.

How much Forex India has and who is custodian of Forex?

Currently India has approx $300 billion of foreign exchange. Reserve Bank of India (Central Bank of the Country) is custodian of foreign exchange according to FEMA Act 1999.

What is Current Account convertibility?

Convertibility of Rupee under Current Account Transactions is called as Current Account Convertibility. Rupee is now fully convertible under current account convertibility. RBI is given discretionary powers under FEMA Act to instruct authorized dealers for various remittances abroad.

What is Capital Account Convertibility?

Convertibility of Rupee under Capital Account Transactions is called as Capital Account Convertibility. Rupee is still not fully convertible under this and Central Govt or RBI or both  permission is required in this. S.S.Tarapoor committee is related to CAC.

What is Balance of Payment?

Balance of Payment is the summary of Economic Transaction of a country’s residents with the rest of World in a year. It includes Export and Import, Gifts and Grants, Investment, Income from investment, Increase and Decrease of Forex Reserve of a country.

What is Balance of Trade?

Balance of trade is the difference of export and import of country’s total merchandise trade and trade in services.
What is Fiscal Deficit?

Fiscal Deficit is the excess of Government Planned and Non-Planned expenditure over total receipts like tax-receipts. Fiscal Deficit is 5.1% of GDP estimated for this fiscal (FY12

What is Bank Overdraft?

Bank Overdraft is a facility given by Banks to its preferred and well rated customers or corporate under which a limit is provided in Current Account of Bank. If there is no money in customer’s account then also customer can avail facility of cheque or cash till the limit is breached.

7)What is the difference b/w NRI and NRO?

What is MSF?

MSF is the rate at which banks can borrow overnight from RBI.This was introduced in the monetary policy of RBI for the year 2011-2012. 
The MSF is pegged 100bps or a % above the repo rate.
Banks can borrow funds through MSF when there is a considerable shortfall of liquidity. This measure has been introduced by RBI to regulate short-term asset liability mismatches more effectively

NPA : NON PERFORMING ASSETS

NPA is 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. Non-performing assets are problematic for financial institutions since they depend on interest payments for income. Troublesome pressure from the economy can lead to a sharp increase in non-performing loans and often results in massive write-downs.

BALANCE SHEET:

                        In financial accounting, a balance sheet or statement of financial position is a summary of the financial balances of a sole proprietorship, abusiness partnership, a corporation or other business organization, such as an LLC or an LLP. Assets, liabilities and ownership equity are listed as of a specific date, such as the end of its financial year. A balance sheet is often described as a "snapshot of a company's financial condition".^[1] Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time of a business' calendar year.

A standard company balance sheet has three parts:

·  assets,

·  liabilities and

·  ownership equity

Microfinance is usually understood to entail the provision of financial services to micro-entrepreneurs and small businesses, which lack access to banking and related services due to the high transaction costs associated with serving these client categories. The two main mechanisms for the delivery of financial services to such clients are

1) relationship-based banking for individual entrepreneurs and small businesses;  

(2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group.

Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.

 The Consumer Price Index measures prices of a selection of goods and services purchased by a "typical consumer".^[4] The inflation rate is the percentage rate of change of a price index over time.

RTGS AND NEFT:

NEFT and RTGS are the two convenient modes of money transfer between banks in India.

The acronym “RTGS” refers to for Real Time Gross Settlement, it is a unique and     popular fund transfer mechanism which enables the transfer of money between two banks on a “real time” and on “gross” basis.

“NEFT” is the abbreviation for National Electronic Funds Transfer which is an online system for transferring funds between financial institutions. This system was introduced in 2005 and is highly improved version of EFT (Electronic Funds Transfer) which was confined to a select centre.

•The fundamental difference between RTGS and NEFT which can be clearly educed from the above definitions is that RTGS is based on gross settlement and NEFT is a net-settlement process.

•RTGS is the swiftest money transfer system through the banking channel as it is done in real time (‘push’ transfer), while NEFT being net based is comparatively slower than RTGS.

•In RTGS payment transaction will not involve any waiting period which is the true meaning of “real time” settlement. Under normal circumstances the transactions are settled as soon as they are processed by remitting bank. The transaction is settled on one-one basis without clustering any other transaction making it a “Gross settlement”. The transaction is considered irrevocable as the money transfer occurs in RBI records. NEFT functions on a deferred net settlement (DNS) basis where transactions are completed in batches at specific times. These settlements takes place at a particular point of time and all transactions are held up till that time

•Another significant factor that differentiates RTGS and NEFT is fixing a floor limit. RTGS is an exclusive message based transfer mechanism for an amount over Rs 2 lakhs i.e the minimum amount to be remitted through RTGS is Rs.2 lakhs. There is no upper ceiling for RTGS transactions. Contrary to that, NEFT is used mainly to transfer funds below Rs 2 lakhs, and this system is most commonly used for smaller value transactions involving smaller sum of money i.e from an amount as minute as one rupee. However, there is no maximum limit for transfers through NEFT.

2. What is cross selling?

 Ans: The strategy of pushing new products to current customers based on their past purchases. Cross-selling is designed to widen the customer's reliance on the company and decrease the likelihood of the customer switching to a competitor.

 3. What is bank rate?

 Ans: Bank Rate is the rate at which central bank of the country  (in India it is RBI)  allows finance to commercial banks.

 ***4.What is Prime lending rate and sub-prime lending rate?

 Ans: Sub-prime lending usually refers to the practice of giving loans to those who do not qualify for regular loans at market interest rates because of their poor credit history. Due to the increased risk associated with the takers,

sub-prime loans are offered at a rate higher than market rates. These loans are risky for both, those who are giving and those who are taking, because these combine high interest rates, bad credit history.

 5.What is base rate?What is present value?

 Ans: The Base Rate is the minimum interest rate of a Bank below which it cannot lend, except  for DRI advances, loans to bank's own employees and loan to banks' depositors against their own deposits. (i.e. cases allowed by RBI) . Remember, RBI does not fix the base rate.   It has issued broad guidelines to bank as to how they should arrive at the base rate.  Thus, individual bank itself fixes its own base rate.  

  

6.Why RBI has introduced the concept of base rate?

 Ans: Following the announcement in the Annual Policy Statement for the year 2009-10,  Reserve Bank of India constituted a Working Group on Benchmark Prime Lending Rate (Chairman: Shri Deepak Mohanty) to review the present  benchmark prime lending rate (BPLR) system and suggest changes to make credit pricing more transparent. The Base Rate system will replace the BPLR system with effect from July 1, 2010.

8.What is CRR?What is present value?

 Ans: CRR means Cash Reserve Ratio.  Banks in India are required to hold a certain proportion of their deposits in the form of cash.  However, actually Banks  don’t hold these as cash with themselves, but deposit such case with Reserve Bank of India (RBI) / currency chests, which is considered as  equivalent to holding cash with RBI. This minimum ratio (that is the part of the total deposits  to be held as cash) is stipulated by the RBI and is known as the CRR or  Cash Reserve Ratio. 

9. What is SLR rate? What is present value?

Ans: SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates  the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities.  Thus, we can say that it is ratio of cash and some other approved securities to liabilities (deposits) It regulates the credit growth in India. The ratio of liquid assets to demand and time liabilities is known as Statutory Liquidity Ratio (SLR).  RBI is empowered to increase this ratio up to 40%.  An increase in SLR  also restrict the bank’s leverage position to pump more money into the economy. SLR cut by 1% to 23%.  No change in Repo / Reverse Repo / MSF / Bank Rate.- 1st Quarter Review of Monetary Policy 2012-13

10.What are negotiable instruments?

Ans: A transferable, signed document that promises to pay the bearer a sum of money at a future date or on demand. Examples include checks, bills of exchange, and promissory notes.

  

11.What is the difference between cheque and draft?

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.

Demand Draft (DD)A demand draft is an instrument used for effecting transfer of money. It is a Negotiable Instrument. To buy a "DD" from a Bank, you are required to fill an application form which asks the following information :

·  Name of the recipient

·  Amount to be transferred

·  Place where the transferred money is to be paid

Mode in which you will pay money to the Bank i.e. in cash or by debit to your account

The application form along with the cheque on your account or cash is deposited with the counter clerk who gives you a Demand Draft (which looks like a cheque) for the amount.
accepting payment through DD is more safer than accepting payment through cheque because Cheque may dishoner in case of in-sufficiant balance in drawer's account while DD is pre-paid.
Banks charge commission for issuing of DD and it vary according to status of a/c holder. They even issue DD free of cost to thier prestigious customers.  

12.What are the functions of Reserve bank of india?

16.What is service tax?What is excise duty and custom duty?

Service tax is a tax which is payable on services provided by service provider. Just like excise duty which is payable on goods  which are manufactured. The tax payable by the provider of services is govt of india

 23.What are different types of accounts exist in banks?

bank accounts may have a positive, or credit balance, where the bank owes money to the customer; or a negative, or debit balance, where the customer owes the bank money.^[1]

Broadly, accounts opened with the purpose of holding credit balances are referred to as deposit accounts; whilst accounts opened with the purpose of holding debit balances are referred to as loan accounts. Some accounts can switch between credit and debit balances.

Some accounts are categorized by the function rather than nature of the balance they hold, such as savings accounts.

All banks have their own names for the various accounts which they open for customers.

Types of accounts

Transactional account Deposit account Checking account Current account Personal account Transaction deposit

Savings Account Individual Savings Account Time deposit / certificate of deposit Tax-Exempt Special Savings Account Tax-Free Savings Account Money market account

Other accounts Loan account Joint account Low-cost account Nostro and vostro accounts Numbered bank account Negotiable Order of Withdrawal account

24.What are deposits?

A deposit account is a savings account, current account, or other type of bank account, at a banking institution that allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank's books, and the resulting balance is recorded as a liability for the bank, and represent the amount owed by the bank to the customer. Some banks charge a fee for this service, while others may pay the customer interest on the funds deposited.

27.What is KYC?

KYC is an acronym for “Know your Customer”, a term used for customer identification process. It involves making reasonable efforts to determine true identity and beneficial ownership of accounts, source of funds, the nature of customer’s business, reasonableness of operations in the account in relation to the customer’s business, etc which in turn helps the banks to manage their risks prudently. The objective of the KYC guidelines is to prevent banks being used, intentionally or unintentionally by criminal elements for money laundering.

KYC has two components - Identity and Address. While identity remains the same, the address may change and hence the banks are required to periodically update their records.

29.What is CAR?

Capital adequacy ratios ("CAR") are a measure of the amount of a bank's core capital expressed as a percentage of its risk-weighted asset.

Capital adequacy ratio is defined as

TIER 1 CAPITAL - (paid up capital + statutory reserves + disclosed free reserves) - (equity investments in subsidiary + intangible assets + current & b/f losses)

TIER 2 CAPITAL -A)Undisclosed Reserves, B)General Loss reserves, C) hybrid debt capital instruments and subordinated debts

where Risk can either be weighted assets ( ) or the respective national regulator's minimum total capital requirement. If using risk weighted assets,

 ≥ 10%.^[1]

The percent threshold varies from bank to bank (10% in this case, a common requirement for regulators conforming to the Basel Accords) is set by the national banking regulator of different countries.

Two types of capital are measured: tier one capital (  above), which can absorb losses without a bank being required to cease trading, and tier two capital (  above), which can absorb losses in the event of a winding-up and so provides a lesser degree of protection to depositors.

32.What is Fund Flow & Cash Flow Statement?

Cash flow is nothing but flow of cash during a particular period of time. It is a strong Analysis tools used by Large and medium scale companies to make Analysis of Inflow and Outflow of money during a particular period of time. Now a days even small scale industries are using this tools.

Fund Flow shows the flow of money from different Activities .This helps the management to make analysis of the Flow of funds from activities such as Operating Activities, Investment Activities, Financing Activities etc.

33.What is Depreciation?

Depreciation is a non-cash expense that reduces the value of an asset over time. Assets depreciate for two reasons:

·  Wear and tear. For example, an auto will decrease in value because of the mileage, wear on tires, and other factors related to the use of the vehicle.

·  Obsolescence. Assets also decrease in value as they are replaced by newer models. Last year's car model is less valuable because there is a newer model in the marketplace.

Depreciation is calculated as follows:

·  The original cost of the asset, including costs of acquiring the asset, transporting it, and setting it up

·  Less the salvage value (the "scrap" value)

·  Divided over the years of useful life of the asset.

Depreciation is determined by one of several methods approved by the IRS.

39.What is Gross Profit & Net Profit?

Gross profit = Net sales - Cost of goods sold

 43.What is NABARD?Does it give loans to RRB?

NATIONAL BANK FOR RURAL AND AGRICULTURAL DEVELOPMENT 

44.What is SIDBI?

SMALL INDUSTRIAL DEVELOPMENT BANK OF INDIA

50.What is CBS AND ATM?

 CORE BANKING SOLUTIONS , AUTOMATIC TELLER MACHINE

54.What is commercial banking?

A commercial bank (or business bank) is a type of financial institution and intermediary. It is a bank that lends money and provides transactional, savings, and money market accounts and that accepts time deposit. ^[1]

57.What is International Trade?

 International trade is the exchange of capital, goods, and services across international borders or territories.^[1] In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries.

61.What are different kind of banks exist in india?

Type 1. Saving Banks

Saving banks are established to create saving habit among the people. These banks are helpful for salaried people and low income groups. The deposits collected from customers are invested in bonds, securities, etc. At present most of the commercial banks carry the functions of savings banks. Postal department also performs the functions of saving bank.

Type 2. Commercial Banks

Commercial banks are established with an objective to help businessmen. These banks collect money from general public and give short-term loans to businessmen by way of cash credits, overdrafts, etc. Commercial banks provide various services like collecting cheques, bill of exchange, and remittance money from one place to another place.

In India, commercial banks are established under Companies Act, 1956. In 1969, 14 commercial banks were nationalized by Government of India. The policies regarding deposits, loans, rate of interest, etc. of these banks are controlled by the Central Bank.

 Type 3. Industrial Banks / Development Banks

Industrial / Development banks collect cash by issuing shares & debentures and providing long-term loans to industries. The main objective of these banks is to provide long-term loans for expansion and modernization of industries.

In India such banks are established on a large scale after independence. They are Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment Corporation of India (ICICI) and Industrial Development Bank of India (IDBI).

 Type 4. Land Mortgage / Land Development Banks

Land Mortgage or Land Development banks are also known as Agricultural Banks because these are formed to finance agricultural sector. They also help in land development.

In India, Government has come forward to assist these banks. The Government has guaranteed the debentures issued by such banks. There is a great risk involved in the financing of agriculture and generally commercial banks do not take much interest in financing agricultural sector.

 Type 5. Indigenous Banks

Indigenous banks means Money Lenders and Sahukars. They collect deposits from general public and grant loans to the needy persons out of their own funds as well as from deposits. These indigenous banks are popular in villages and small towns. They perform combined functions of trading and banking activities. Certain well-known indian communities likeMarwaries and Multani even today run specialised indigenous banks.

 Type 6. Central / Federal / National Bank

Every country of the world has a central bank. In India, Reserve Bank of India, in U.S.A, Federal Reserve and in U.K, Bank of England. These central banks are the bankers of the other banks. They provide specialised functions i.e. issue of paper currency, working as bankers of government, supervising and controlling foreign exchange. A central bank is a non-profit making institution. It does not deal with the public but it deals with other banks. The principal responsibility of Central Bank is thorough control on currency of a country.

 Type 7. Co-operative Banks

In India, Co-operative banks are registered under the Co-operative Societies Act, 1912. They generally give credit facilities to small farmers, salaried employees, small-scale industries, etc. Co-operative Banks are available in rural as well as in urban areas. The functions of these banks are just similar to commercial banks.

 Type 8. Exchange Banks

Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of Foreign Banks working in India. These banks are mainly concerned with financing foreign trade.

Following are the various functions of Exchange Banks :-

Remitting money from one country to another country,

Discounting of foreign bills,

Buying and Selling Gold and Silver, and

Helping Import and Export Trade.

 Type 9. Consumers Banks

Consumers bank is a new addition to the existing type of banks. Such banks are usually found only in advanced countries like U.S.A. and Germany. The main objective of this bank is to give loans to consumers for purchase of the durables like Motor car, television set, washing machine, furniture, etc. The consumers have to repay the loans in easy installments.

The Bank Insurance Model ('BIM'), also sometimes known as 'Bancassurance', is the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products.

BIM allows the insurance company to maintain smaller direct sales teams as their products are sold through the bank to bank customers by bank staff and employees as well.

83.What are LIBOR and SIBOR?

    LIBOR is London Inter-Bank Offered Rate while SIBOR is Singapore Inter-Bank Offered Rate.

90.What is CAMELS?

the CAMEL ratings system is a method of evaluating the health of credit unions by the National Credit Union Administration(NCUA). The rating, adopted by the NCUA in 1987, is based upon five critical elements of a credit union's operations:^[1]

§  (C) Capital

§  (A) Asset quality

§  (M) Management

§  (E) Earnings

§  (L) asset Liability management

This rating system is designed to take into account and reflect all significant financial and operational factors examiners assess in their evaluation of a credit union's performance. Credit unions are rated using a combination of financial ratios and examiner judgment.^[1]

91.WHAT IS MONEY MARKET?

 As money became a commodity, the money market became a component of the financial markets for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less. Trading in the money markets is done over the counter, iswholesale. Various instruments exist, such as Treasury bills, commercial paper, bankers' acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage-, and asset-backed securities.^[1] It provides liquidity funding for the global financial system. Money markets and capital markets are parts of financial markets. The instruments bear differing maturities, currencies, credit risks, and structure. Therefore they may be used to distribute the exposure.^[2]

92.What is Treasury Bills?

 93.What is Commercial Papers and Certificates of Deposits?

1. Certificates of Deposit (CD):

The Certificates of Deposit (CD) can be issued only by the scheduled commercial banks in multiple of Rs. 25 lakhs, subject to the minimum size of an issue being Rs. 1 crore. Their maturity will vary between three months and one year.

CDs will be issued at discount to face value and the discount rate will be freely determined. They will be further freely transferable by endorsement and delivery.

CDs will, however, be subject to reserve requirements. Banks will neither be allowed to grant loans against CDs, nor can they buy their own CDs.

2. Commercial Paper (CP):

Commercial Paper (CP) can be issued by a listed company which has a net worth of at least Rs. 10 crores and a working capital limit of not less than Rs. 25 crore. CPs will be issued in multiples of Rs. 25 lakhs subject to the minimum size of an issue being Rs. 1 crore.

Their maturity ranges from three months to sue months. They will be freely transferable by endorsement and delivery. The company issuing CP will have to obtain every six months a specified rating from an agency approved by the Reserve Bank.

The company can raise money through CP up to a maximum amount equivalent to 20% of its working capital limits. Banks will not be permitted to either underwrite or co- accept the issue of CP.

On January 3,1990, the Reserve Bank issued guidelines for issue of CP, according to which a company will have to obtain PI + rating from Credit Rating Information Service of India Ltd. and also classification under Health Code Number from its financing banks and it has also to maintain the current ratio of 1.33 : 1 to be eligible to issue CP.

  Basel 111:

Basel III (or the Third Basel Accord) is a global regulatory standard on bank capital adequacy, stress testing and market liquidity riskagreed upon by the members of the Basel Committee on Banking Supervision in 2010–11, and scheduled to be introduced from 2013 until 2018.^[1][2] The third installment of the Basel Accords (see Basel I, Basel II) was developed in response to the deficiencies in financial regulation revealed by the late-2000s financial crisis. Basel III strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage. The OECD estimates that the implementation of Basel III will decrease annual GDP growth by 0.05–0.15%.^[3][4] Critics suggest that greater regulation is responsible for the slow recovery from the late-2000s financial crisis,^[5][6] and that the Basel III requirements will increase the incentives of banks to game the regulatory framework, which could further negatively affect the stability of the financial system

94.What is bankers acceptance?

95.WHAT DO YOU UNDERSTAND BY CAPITAL ADEQUACY RATIO,CRAR,BASEL II AND III?

97.WHAT IS SARFAESI ACT 2002. HOW IS IT USEFUL TO BANKS?

he Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, allows banks and financial institutions to auction properties (residential and commercial) when borrowers fail to repay their loans. It enables banks to reduce their non-performing assets ( NPAs) by adopting measures for recovery or reconstruction.

When do properties fall under this Act?
If a borrower defaults on repayment of his/her home loan for six months at stretch, banks give him/her a 60-day period to regularise the repayment, that is, start repaying. On failure to do so, banks declare the loan an NPA and auction it torecover the debt.

101.WHAT SIGNIFICANT TRENDS DO YOU SEE IN FUTURE FOR BANKING SECTOR?

102.What is e-banking and m-banking?

103.What is cash management bills?

he new bill will allow the government to raise finance only when it needs and avoid holding excess cash for longer duration.

The finance ministry, at present, finances the governments’ short-term need for funds through three types of treasury bills issued for 91 to 364 days and ways & means advances, which is borrowing from the Reserve Bank of India.

The treasury bills have a variable spread while the ways & means advances carry the same rate of interest as the repo rates. Therefore, in both cases there is an interest cost, which, given the scale of its operation, can be massive.

104.What is bank asset and liabilities?

Balance Sheet of a Commercial Bank

Liabilities	Assets
a. Share Capital	a. i. Cash in Hand
b. Reserve Funds	ii. Cash with the Central Bank (RBI)
c. Deposits	iii. Cash with the other banks
i. Fixed Deposits	b. Money at short
ii. Saving Deposits	c. Bills and securities discounted
iii.Current Deposits	d. Investment of bank
iv. Other Deposits	e. Loans and Advances given
d. Borrowings	f. Other Assets

107.Difference between credit and debit card?

108.What is bearer cheque,order cheque,uncrossed/open cheque,crossed cheque,anti dated cheque,post dated cheque and stale cheque?

111.what is paperless banking, green banking?

112.What are the different type of deposits and a/c?

113.Have you used online banking and how?

114. What are Repo rate and Reverse Repo rate?

Ans: Repo (Repurchase) rate is the rate at which the RBI lends shot-term money to the banks against securities. When the repo rate increases borrowing from RBI becomes more expensive.  Therefore, we can say that in case, 

. 

Reverse Repo rate is the rate at which banks park their short-term excess liquidity with the RBI.  The banks use this tool when they feel that they are stuck with excess funds and are not able to invest anywhere for reasonable returns. An increase in the reverse repo rate  means that the RBI is ready to borrow money from the banks at a higher rate  of interest. As a result, banks would prefer to keep more and more surplus funds with RBI.

Thus, we can conclude that Repo Rate signifies the rate at which liquidity is injected in the banking system by RBI, whereas Reverse repo rate signifies the rate at which the central bank absorbs liquidity from the banks. 

Cheque Truncation System (CTS) or Image-based Clearing System (ICS), in India, is a project undertaken by theReserve Bank of India – RBI, for faster clearing of cheques. CTS is basically an online image-based cheque clearing system where cheque images and Magnetic Ink Character Recognition (MICR) data are captured at the collecting bank branch and transmitted electronically.

Truncation means, stopping the flow of the physical cheques issued by a drawer to the drawee branch. The physical instrument is truncated at some point en-route to the drawee branch and an electronic image of the cheque is sent to the drawee branch along with the relevant information like the MICR fields, date of presentation, presenting banks etc.

Cheque truncation, would eliminate the need to move the physical instruments across branches, except in exceptional circumstances. This would result in effective reduction in the time required for payment of cheques, the associated cost of transit and delays in processing, etc., thus speeding up the process of collection or realization of cheques.

Expected Benefits

For Banks: Banks can expect multiple benefits through the implementation of CTS, like faster clearing cycle means realization of proceeds of cheque possible within the same day. It offers better reconciliation/verification process, better customer service and enhanced customer window. Operational efficiency will provide a direct boost to bottom lines of banks as clearing of local checks is a high cost low revenue activity. Besides, it reduces operational risk by securing the transmission route. Centralized image archival system ensures data storage and retrieval is easy. Reduction of manual tasks leads to reduction of errors. Customer satisfaction will be enhanced, due to the reduced turn around time (TAT). Real-time tracking and visibility of the cheques, less fraudulent cases with secured transfer of images to the RBI are other possible benefits that banks may derive from this solution.

For Customers: CTS / ICS substantially reduces the time taken to clear the cheques as well enables banks to offer better customer services and increases operational efficiency by cutting down on overheads involved in the physical cheque clearing process. In addition, it also offers better reconciliation and fraud prevention. CTS / ICS uses cheque image, instead of the physical cheque itself, for cheque clearance thus reducing the turn around time drastically.

3) What is the role of PO? "But it is managerial Skill of PO to do work as PO"

1) tell us about ur family background

5) why banking

The whole process of financial inclusion will not be possible without the contribution of banks. Banks are the key pillars of India’s financial system. Public have immense faith in banks. Share of bank deposits in the total financial assets of households has been steadily rising (presently at about 40%). Banks enjoy considerable goodwill and access in the rural regions. There are 32600 branches in rural India (about 50% of total), and 14400 semi-urban branches. 196 exclusive Regional Rural Banks in deep hinterland are present. Rural and semi-urban bank accounts constitute close to 60% in terms of number of accounts.

Given the above facts India should formulate its strategy in a manner that the next phase of growth in rural areas should be facilitated by banks.

Lending to agricultural activities and small scale industry is in the priority sector for lending of the commercial banks. This obligation can be strategically utilized to willingly create a market for banking products. This will add value to their balance sheet and will act as another channel for financial inclusion of ill-banked rural areas.

- See more at: http://www.sbank.in/2012/12/bank-po-interview-material.html#sthash.Hh5Ak1Sw.dpuf