Banking Intervie Quastions With Answers
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Banking Intervie Quastions With Answers
what makes public bank different from commercial bank?
- what are the major institutions for which the CBE gives service in collaboration with the out side world?
- Why cbe expands its branches throughout out the country?
- Why cbe bears interest to depositors, while the deposit is the liability of the bank?
Particular QUESTIONS
– introduce your self
- What's your future plan?
- what is your weakness and strength?
- if it happens some quarrel among staff members what will you do on the conflict resolution?
- what are your special qualities and talents?
- what is your motive for your engagement as a candidate in CBE?
- How important salary do you expect from cbe?
- Do you have a computer skill and have you take a computer related courses in connection with your field’s?
COURSE RELATED QUESTIONS FOR THOSE ACCOUNTING AND FINANCE GRADUATES
– What are the types of fiscal statements? And define them.
- what is the concept of cash flow statement?
- what are the GAAP principles? and define three/ four of them.
- What's the difference b/ n withdrawal and expense?
- what is the d/ ce b/ n real account and nominal account?
- What's the d/ ce among fiscal accounting, cost accounting and management accounting?
- What are the project evaluation techniques and define them?
- From those project evaluation techniques which technique is the most preferable and why?
- what are the steps of accounting cycle?
- What's depreciation?
- What are the methods of depreciation?
- Which method is known as accelerated depreciation method?
- What's bank reconciliation and steps of bank reconciliation?
- What items are recorded at bank side?
- What's z d/ ce b/ n simple interest and compound interest?
- What's the d/ ce b/ n accrual and deferral?
- What's the difference b/ n finance and accounting?
- what are the inventory systems and methods?
- What's the difference b/ n capital expenditure and profit expenditure?
- Define the term partnership and corporation with their properties?
- What's petty cash?
General interview questions
About your final BA/ BSC research
- What's your research topic
- How numerous Research questions do you answer would you tell me those research questions you done What's your research finding explain briefly
Describe your research General and specific objectives
Note that you must be apprehensive of about all your research paper interviewers may ask every questions about your paper
About subject matter Economics
- what is macro profitable policies
- What's opportunity cost
- What are macro profitable problems
- What's Micro Economics
- about Market structure Etc
Accounting
- what Bank reconciliation is obligatory question
- Debit and credit General concepts
- Cash
- Trial Balance finacial statements Note accounting questions are also asked for management students management
- What's Management
- what is human resource?
- The difference between manager and boss- what is the difference between Leader and boss
- What's cost management.
Note that The aft ground questions are obligatory For all subjects Return back for other course
Banking Interview Questions & Answers
What's bank?
What are the types of banks?
A bank is a fiscal institution licensed as a receiver of cash deposits. There are two types of banks, commercial banks and investment banks. In utmost of the countries, banks are regulated by the public government or central bank.
What's investment banking?
Investment banking manages portfolios of fiscal assets, commodity and currency, fixed income, commercial finance, commercial premonitory services for mergers and accessions, debt and equity writingetc.
What's commercial bank?
commercial bank is owned by the group of individuals or by a member of Federal Reserve System. The commercial bank offer services to individuals, they're primarily concerned with receiving, deposits and lending to business. similar bank earns money by imposing interest on the loan espoused by the borrower. The money that's deposited by the customer will be used by the bank to give business loan, auto loan, mortgages and home repair loans.
What are the types of commercial Banks?
a) Retail or consumer banking It's a small tomid-sized branch that directly deals with consumer’s transaction rather than commercial or other banks
b) Commercial or business banking Commercial banking deals with cash management, underwriting, financing and issuing of stocks and bonds
c) Securities and Investment banking Investment banking manages portfolios of fiscal assets, commodity and currency, fixed income, commercial finance, commercial premonitory services for mergers and accessions, debt and equity writingetc.
d) Non-traditional options
There are numerousnon-bank entities that offer fiscal services like that of the bank.
The entities include credit card companies, credit card report agencies and credit card issuers
What's consumer bank?
Consumer bank is a new addition in the banking sector, similar bank exist only in countries likeU.S.A and Germany. This bank provides loans to their customer to buyT.V, Car, furnitureetc. and give the option of easy payment through installment.
What are the types of accounts in banks?
a) Checking Account You can access the account as the saving account but, unlike saving account, you can not earn interest on this account. The benefit of this account is that there's no limit for withdrawal.
b) Saving Account You can save your money in similar account and also earn interest on it. The number of withdrawal is limited and need to maintain the minimal amount of balance in the account to remain active.
c) Money Market Account This account gives benefits of both saving and checking accounts. You can withdraw the amount and yet you can earn advanced interest on it. This account can be opened with a minimal balance. d) CD( Certificate of Deposits) Account In similar account you have to deposit your money for the fixed period of time (5- 7 years), and you'll earn the interest on it. The rate of interest is decided by the bank, and you can not withdraw the funds until the fixed period expires. What are the different ways you can operate your accounts? You can operate your bank accounts in different ways like a) Internet banking b) Telephone or Mobile banking c) Branch or Over the counter service
d) ATM( Automated Teller Machine) What are the things that you have to keep in concern before opening the bank accounts? Before opening a bank account, if it's a saving account, you have to check the interest rate on the deposit and whether the interest rate remains harmonious for theperiod.However, then look for how numerous cheques are free to use, If you have the checking account. Some banks may charge you for using paper cheques or ordering new cheque books. Also, check for different debit card option that's provided on opening an account and online banking features
What's ‘Crossed Cheque ’?
A crossed cheque indicates the amount should be deposited into the payees account and can not be cashed by the bank over the counter. Here in the image, number# 2, you can see twocross-lines on the left side corner of the cheque that indicates crossed cheque. What's overdraft protection? Overdraft protection is a service that's provided by a bank to their customer. For instance, if you're holding two accounts, saving and credit account, in the same bank. Now if one of your accounts doesn't have enough cash to process the cheques, or to cover the purchases. The bank will transfer money from one account to another account, which doesn't have cash so to prevent check return or to clear your shopping or electricity bills.
Does a bank charge for ‘ overdraft protection ’ service? Yes, bank will charge on‘ overdraft protection ’ services but the charges will be applicable only when you start using the service.
What's (APR) Annual Percentage Rate?
APR stands for Annual Percentage Rate, and it's a charge or interest that the bank imposes on their customers for using their services like loans, credit cards, mortgage loan etc.
The interest rate or fees imposed is calculated annually.
What's‘ high rate ’?
Basically, ‘ high rate ’ is the rate of interest that's decided by nations (U.S.A) largest banks for their favored customers, having a good credit score. important ‘variable’ interest depends on the‘ high rates ’. For example, the ‘ APR’ (Annual Percentage Rate) on a credit card is 10 plus high rate, and if the high rate is 3, the current ‘ APR ’ on that credit card would be 13.
What's ‘Fixed’ APR and ‘Variable’ APR? ‘ APR ’( Annual Percentage Rate) can be ‘Fixed’ or ‘Variable’ type. In ‘Fixed APR’, the interest rate remains same throughout the term of the loan or mortgage, while in ‘ Variable APR ’ the interest rate will change without notice, based on the other factors like ‘high rate ’.
What are the different types of banking software applications are available in the Industry?
There are numerous types of banking software applications and many are listed below
a) Internet banking system Internet banking allows the customers and fiscal institution to conduct final transaction using banks or fiscal institute website.
b) ATM banking (Automated Teller Machine) It's an electronic banking outlet, which allows customers to complete introductory transaction.
c) Core banking system Core banking is a service provided by a networked bank branches. With this, customer can withdraw money from any branch.
d) Loan operation system The database collects all the information and keeps the track about the customers who borrows the plutocrat.
e) Credit operation system Credit operation system is a system for handling credit accounts, assessing pitfalls and determining how important credit to offer to the customer.
f) Investment management system It's a process of managing money, including investments, banking, budgeting and taxes.
g) Stock market management system The stock market management is a system that manages financial portfolio like securities and bonds.
h) fiscal management system financial management system is used to govern and keep a record of its income, expense and assets and to keep the accountability of its profit.
What's the ‘cost of debt ’?
When any company borrows funds, from a fiscal institution( bank) or other resources the interest paid on that amount is known as ‘cost of debt ’.
What's ‘balloon payment ’?
The ‘balloon payment ’ is the final lump sum payment that's due. When the entire loan payment isn't amortized over the life of the loan, the remaining balance is due as the final repayment to the lender. Balloon payment can occur within an malleable rate or fixed rate mortgage.
What's ‘ Amortization ’? The repayment of the loan by installment to cover top amount with interest is known as ‘ Amortization ’. What's negative Amortization? When repayment of the loan is lower than the loans accumulated interest, then negative Amortization occurs. It'll increase the loan quantum instead of decreasing it. It's also known as ‘ prolonged interest ’. What's the difference between ‘ Cheque ’ and ‘ Demand draft ’? Both are used for the transfer of the amount between two accounts of same banks or different bank. ‘ Cheque ’ is issued by an individual who holds the account in a bank, while ‘ Demand draft ’ is issued by the bank on request, and will charge you for the service. Also, demand draft can not be cancelled, while cheques can be cancelled formerly issued.
What's debt- to- Income ratio? The debt- to- income ratio is calculated by dividing a loan applicant’s total debt payment by his gross income. What's adjustment credit? Adjustment credit is a short- term loan made by the Federal Reserve Bank(U.S) to the marketable bank to maintain reserve requirements and support short term lending, when they're short of cash. What do you mean by ‘ foreign draft ’?
Foreign draft is an alternative to foreign currency; it's generally used to send money to a foreign country. It can be bought from the marketable banks, and they will charge according to their banks rules and norms. People conclude for ‘foreign draft ’ for transferring money as this method of sending money is cheaper and safer. It also enables receiver to pierce the funds quicker than a cheque or cash transfer.
What's ‘Loan grading ’?
The classification of loan based on colorful risks and parameters like repayment threat, borrower’s credit historyetc. is known as ‘ loan grading ’. This system places loan on one to six categories, based on the stability and risk associated with the loan.
What's ‘ Credit- Netting ’?
A system to reduce the number of credit checks on fiscal transaction is known as credit- netting. similar agreement occurs typically between large banks and other fiscal institutions. It places all the future and current sale into one agreement, removing the need for credit cheques on each sale. What's ‘ Credit Check ’? A credit check or a credit report is done by the bank on a base of an existent’s fiscal credit. It's done in order to make sure that an existent is able enough of meeting the fiscal obligation for its business or any other financial sale. The credit check is done keeping many aspects in concern like your arrears, means, incomeetc.
What'sinter-bank deposit? Any deposit that's held by one bank for another bank is known asinter-bank deposit. The bank for which the deposit is being held is referred as the correspondent bank.
What's ILOC( Irrevocable Letter Of Credit)?
It's a letter of credit or a contractual agreement between fiscal institute( Bank) and the party to which the letter is handed. The ILOC letter can not be cancelled under any circumstance and, guarantees the payment to the party. It requires the bank to pay against the drafts meeting all the terms of ILOC. It's valid upto the pronounced period of time. For example, if a small business wanted to contract with an overseas supplier for a specified item they would come to an agreement on the terms of the sale like quality standards and pricing, and ask their separate banks to open a letter of credit for the transaction. The buyer’s bank would forward the letter of credit to the seller’s bank, where the payment terms would be finalized and the shipment would be made. What's the difference between bank guarantee and letter of credit? There isn't important difference between bank guarantee and letter of credit as they both take the liability of payment. A bank guarantee contains further risk for a bank than a letter of credit as it's protecting both parties the purchaser and seller.
a) Banking value chain
b) Accepting deposit
c) Providing funds to borrowers on interest
d) Interest spread e) fresh charges on services like checking account maintenance, online bill payment, ATM transaction What are payroll cards? Payroll cards are types of smart cards issued by banks to grease salary payments between employer and employees. Through payroll card, employer can load salary payments onto an employee’s smart card, and employee can withdraw the salary even though he she does n’t have an account in the bank. What's the card based payments?
There are two types of card payments
a) Credit Card
b) Debit Card
What ACH stands for?
ACH stands for Automated Clearing House, which is an electronic transfer of funds between banks or financial institutions.
What's ‘Availability Float ”?
Availability Float is a time difference between deposits made, and the funds are actually available in the account. It's time to process a physical cheque into your account. For example, you have$,000 already in your account and a cheque of another$,000 dollar is deposited in your account but your account will show balance of$,000 instead of$,000 till your$,000 bone cheque is cleared this processing time is known as availability float.
What do you mean by term ‘ \Loan Maturity ’ and ‘ Yield ’?
The date on which the top amount of a loan becomes due and outstanding is known as ‘ Loan Maturity ’. Yield is commonly referred as the dividend, interest or return the investor receives from a security like stock or bond, interest on fix deposit etc. For example, any investment for$,000 at interest rate of4.25, will give you a yield of$ 425.
What's Cost Of Funds Index (COFI)?
COFI is an index that's used to determine interest rates or changes in the interest rates for certain types of Loans.
What's Convertibility Clause?
For certain loan, there's a provision for the borrower to change the interest rate from fixed to variable and vice versa is referred as Convertibility Clause.
What's Charge- off?
Charge off is a declaration by a lender to a borrower for non-payment of the remaining quantum, when borrower badly falls into debt. The overdue amount is settled as a bad debt.
What ‘ LIBOR ’ stands for?
‘LIBOR ’stands for LondonInter-Bank Offered Rate. As the name suggest, it's an average interest rate offered forU.S dollar or Euro dollar deposited between groups of London banks. It's an transnational interest rate that follows world profitable condition and used as a base rate by banks to set interest rate. LIBOR comes in 8 maturities from overnight to 12 months and in 5 different currencies. Once in a day LIBOR announces its interest rate.
What do you mean by term ‘ Usury ’?
When a loan is charged with high interest rate illegally then it's referred as ‘Usury ’.
Usury rates are generally set by State Law.
What's Payday loan?
A pay- day loan is generally, a small amount and a short- term loan available at high interest rate. A borrower normally writespost-dated cheques to the lender in respect to the amount they wish to borrow.
What do you mean by ‘ cheque endorsing ’?
‘Endorsing cheque’ ensures that the cheque get deposited into your account only. It minimizes the risk of theft. Normally, in endorsing cheque, the cashier will ask you to subscribe at the back of the cheque. The signature should match the payee. The image over here shows the endorsed cheque.
What are the different types of Loans offered by banks?
The different types of loans offered by banks are
a) relaxed particular Loan
b) Secured particular Loan
c) Auto Loans
d) Mortgage Loans
e) Small business Loans
What are the different types of ‘Fixed Deposits ’?
There are two different types of ‘Fixed Deposits ’ Special Term Deposits In this type of ‘Fixed Deposits ’, the earned interest on the deposit is added to the top amount and compounded daily. This amount is accumulated and repaid with the top amount on maturity of the deposit. Ordinary Term Deposits In this type of ‘Fixed Deposits ’, the earned credit is credited to theinvestor’s account, once in a quarter. In some cases, interest may be credited on a yearly basis. The earned interest on fixed deposits isnon-taxable. You can also take a loan against your fixed deposit.
What are the different types of Loans offered by marketable Banks? Start- Up Loans This type of Loan is offered to borrower to start their business and can be used to build a storefront, to acquire inventory or pay franchise fees to get a business rolling. Line of Credit Lines of credit are another type of business loan provided by marketable banks. It's more like a security for your business; the bank allows the customer to withdraw the quantum from readily available funds in an adverse time.
Customer or Company can pay back over time and withdraw money again without going into the loan process. Small Business Administration Loans It's a Federal Agency(U.S) that gives funding to small businesses and entrepreneurs. SBA (Small Business Administration) loans are made through banks, credit unions and other lenders who partners with SBA.
What's ‘ Bill Discount ’?
‘Bill Discount ’ is a settlement of the bill, where your electricity bill or gas bill is sold to a bank for early payment at lower than the face value and the bank will recover the full amount of the bill from you before bill due date. For example, electricity bill for XYZ is$ 1000; the electricity bill company will vend the bill to the bank for 10 to 20 discount to the face value. Then, the bank will buy the electricity bill for$ 900 whose face value is$ 1000, now the bank will recover, full amount of bill from the customeri.e$ 1000. However, the bank will put interest on the outstanding bill and ask the customer for the payment, If the customer fails to pay the bill.
What's ‘ Bill Purchase ’?
In ‘ Bill Purchase ’ the loan will be created for the full value of the draft and the interest will be recovered when the factual payment comes. For example, a ‘Sight draft ’ is presented for which the loan is created for 100 of the draft value. The money is received after 7 days, and then the interest will be recovered for 7 days along with the top amount.
What's ‘ Cheque Discount ’?
Cheque discounting service is offered only by many banks. For instance, if you have a cheque of$ 3000 outstation and the cheque will take 7 seven days for clearance, also bank will offer you a service for early payment. The bank can make an early payment, but they will pay only for certain percentage of the factual amount, here they will pay you$ 2000 but they will charge interest on it and the remaining$ 1000 will be paid, once the outstation cheques get clear
