What do you mean by advances to weaker sections, teaser rate?

01. What do you mean by advances to weaker sections?

The following categories are termed as advances to weaker sections namely- small business
enterprises; marginal farmers; artisans/village and cottage industries for whom loans are granted upto
Rs. 50000.00; SGSY beneficiaries; SC/ST beneficiaries; DRI beneficiaries; SJSRY beneficiaries; SLRS;
self help groups and people belonging to minority community.
02. What do you mean by equated monthly instalments ?

When a term loan is availed by a customer for different purposes, the principal has to be paid in
monthly instalments apart from the interest charged to the loan account

In the case retail loans like housing loans, consumer loans etc., banks are advising the customers to
pay the loan amount in equated monthly instalments spread over a period of time

EMI means principal and interest put together

03. What do you mean by teaser rate?

In the case of long duration loans like housing loans granted to salaried persons, teaser rate is
charged to the loan accounts

Instead of charging a fixed rate of interest, interest is charged at a lower rate at the commencement
of the loan account taking into consideration the salary level of the borrower

Since the borrower is bound to earn increase in salary each year, the rate of interest goes on
increasing and the borrower finds it easy to remit the loan instalments easily without any difficulty
04. What do you know by housing loan?

When the customer avails any loan from the bank for purchase of any house or construction of a
house it is called as housing loan.

In case the party is already having a plot, the loan can be granted to him for construction of the
house on the plot.

The loan is recovered from the party through equated monthly instalments which consist of principal
and interest.

Normally housing loans are granted for longer duration say fifteen to twenty years and banks provide
loans to those who have regular income like salaries, commission etc.,
05. What is the difference between current account and savings account?

Current accounts are opened for business purposes and savings accounts are opened for savings
purposes.

An individual can open savings account for the purpose of saving his money with the bank.

He can open current account for doing his business transactions.

Interest is payable in the case of savings accounts and in the case of current accounts, interest is not
paid by the bankers.

Savings accounts can be opened by individuals, hindu undivided families, clubs, associations, trusts,
charitable institutions etc.

In the case of current accounts, they can be opened by individuals, hindu undivided families, clubs,
associations, trusts, charitable institutions, proprietorship concerns, partnership firms and joint stock
private limited companies and joint stock public limited companies

Savings accounts cannot be opened by proprietorship firms, partnership firms and companies
06. Whether any business concern can open savings bank account?

Business organizations are permitted to open current accounts only.

Proprietorship concerns, partnership concerns, private limited companies and public limited companies
are not allowed to open savings bank accounts.

07. Whether a director in a company can open savings bank account?

The director in his personal capacity can open savings bank account for the purpose of saving his
personal money

The director in his official capacity can open current account for his company
08. What is meant by public sector bank?

When the government holding in any bank is more than 51 percent, it is called as public sector bank.

State Bank of India and group banks, all nationalized banks including Bharathiya Mahila Bank and
Regional Rural Banks are called as public sector banks.
09.

10.

When the banks were nationalized in our country and for what purpose?
Banks were nationalized so that they can serve better for the society.
Banks were nationalized in different stages
During the first stage, fourteen banks were nationalized on 19.07.1969 and during the second stage
six banks were nationalized.
Industrial Development Bank of India Limited was a development bank and it was converted into a
commercial bank called as IDBI bank during 2004 and it is owned by Government of India
Bharathiya Mahila Bank was opened by Government of India during the year, 2013
At present there are 21 nationalised banks in the country apart from State Bank of India and its
subsidiaries.
Which is the largest bank in our country ?
The largest bank in the country is State Bank of India.
When it comes to private sector banks, ICICI bank is the largest bank.
The size of the bank is decided by the total business and the total business consists of total deposits
and total advances as on 31st March each year.

What are the developmental functions of RBI?

01. What are the developmental functions of RBI?

The developmental functions of RBI are: agriculture development, promotion of industrial finance,
promotion of export through refinance, development of bill market, development and regulation of
banking system.
02. What are the regulatory functions of RBI?

The regulatory functions of RBI are qualitative credit control, bank rate, differential rate of interest,
open market operations, maintenance of CRR and SLR, direct action, credit authorization scheme and
moral persuasion
03. What are the different types of financial intermediaries in our country?

The various financial intermediaries in our country are 1) RBI Reserve Bank of India; 2) SEBI
Securities and Exchange Board of India and 3) IRDA Insurance Regulatory and Development
Authority of India.

RBI monitors the functions of various banks in the country; SEBI monitors and regulates capital
markets and IRDA monitors the functions of insurance companies.
04. What are the different types of banks in our country?

In our country the following banks are available savings banks; commercial banks; industrial banks;
development banks; land development banks; indigenous banks; central bank; cooperative banks;
exchange banks and consumer banks

05. What are the different types of secondary functions of any bank?

They are agency or representative functions; general utility services and social development
functions.
06. What do you mean by agency or representative functions of any bank?

They are collection and payment of various items; purchase and sale of securities; trustee and
executor; remitting money; purchase and sale of financial exchange; letter of references and other
agency functions.
07. What are the general utility services offered by the banks?

They are : provision of safe deposit locker facilities; provision of business information; helping in
transportation of goods; acting as a referee; issuing of letters of credit; acting as underwriters; issue
of traveler cheques; issue of gift cheques and dealing in merchant banking activities
08. What are the social development functions of a bank ?

They are capital formation; inducement to innovations; impact on the rate of interest; role on the
development of rural sector; helping in pushing up the demand.
09. Can you name some items which are covered under negotiable instruments act?

They are promissory notes; bills of exchanges; cheques, exchequer bills; circular notes; dividend
warrants; share warrants; bearer debentures; bank notes and bank drafts
10. What do you mean by priority sector advances?

In order to boost development of agriculture and industries, Government of India has stipulated
certain norms under which banks are in a position to lend certain percentage of their advances
exclusively to certain categories of borrowers called as priority sector advances.

Loans provided to the following borrowers are classified as priority sector advances namely Retail
traders, Small business enterprises, Professional and self employed persons; Agriculturists; Small
scale industries, Self help groups, Loans under differential rate of interest scheme and loans to people
belonging to SC/ST communities.

Commercial banks representing State Bank of India and group banks, nationalized banks and all
private sector banks have to lend 40% of their loans to beneficiaries pertaining to priority sector
categories; Regional rural banks to lend 60% to priority sector categories and foreign banks having
branches in the country to lend 32% to priority sector categories

What do you mean by repo rate, reverse repo rate, Cash Reserve
Ratio, Statutory liquidity ratio?

01. What do you mean by repo rate?

It is the rate at which RBI lends short term funds to the commercial banks against government
securities.

In order to temporarily expand the money supply, the central bank decreases repo rates enabling the
banks to swap the government securities for cash.

Repo is the abbreviation of Repurchase and to contract the money supply RBI increases the repo
rates.
02. What do you mean by reverse repo rate?

The reverse repo rate is the interest rate that banks receive when they deposit the excess funds with
Reserve Bank of India.

This reverse repo rate is always lower than the repo rate by 100 basis points.

Increase or decrease in the repo and reverse repo rate have an effect on the interest rate on banking
products such as loans, mortgages and savings.
.
03. What do you mean by CRR?

CRR means Cash Reserve Ratio and as per the guidelines issued by Reserve Bank of India, all banks
are in a position to maintain a certain percentage of their deposits (technically called as net demand
and time liabilities) in their accounts with the RBI.

For the purpose of CRR, banks keep excess currency with them in their currency chests and CRR is
calculated based upon the total cash kept in currency chests and the deposits held by the commercial
banks with RBI and other banks like SBI

CRR can range from 3 percent to 15 percent. By increasing CRR by merely 0.25 percent, an amount
of Rs. 15000 crores of liquid funds can be transferred from the commercial banks to the coffers of RBI.

When CRR is reduced, the liquid funds are transferred from RBI to commercial banks.

At present Cash reserve ratio is 4% p.a.

04. What do you mean by SLR?

Statutory Liquidity Ratio refers to the stipulation by RBI that approximately 21.75% of their total
demand and time deposits has to be kept in the form of government securities, gold and cash.

Primarily SLR refers to the amount invested by the banks in Government of India securities. RBI has
the right to change the statutory liquidity ratio from time to time upto 40 %.

On reduction of SLR, the availability of funds for the banks moves up and the banks tend to
lend more loans to the common public.

When there is an increase in SLR, on account of shortage of funds (since blocked with RBI) banks
reduce lending

05. What do you mean by PLR?

Prime lending rate is the rate at which the commercial banks are willing to lend to their triple A rated
No: 1 borrowers.

The lending rates by the bank for other borrowers whose credit worthiness is low will be more than
prime lending rate.

RBI has deregulated the lending rates that are to be charged by the banks for advance above Rs. 2
lakhs.
06.

What do you mean by BPLR and base rate?

It is the rate at which commercial banks must charge to all their advances less than Rs. 2 lakhs.
It is known as benchmark prime lending rate
At present the system of BPLR has been replaced by Base rate system
Base rate is the minimum lending rate to be fixed by each commercial bank and to be informed to the
public and others.
Commercial banks should not lend loans below the base rate
A range is provided by RBI within which the base rate should be fixed by the banks

07. Who is a non resident Indian?

Non resident Indian is the person who is an Indian national residing abroad for more than 182 days
and he has gone abroad for the following purposes namely; business, studies and employment.

The above definition is as per Foreign Exchange Regulations Act 1973

08.

What are the different types of accounts that can be opened by Non Resident Indians?
Non Resident Indians can open the following accounts
Non resident ordinary account, Non resident External account, FCNR account and RFC account.
FCNR means foreign currency non resident and RFC means resident foreign currency

09. What are the different currencies in which FCNR accounts can be opened?

FCNR accounts can be opened in the following currencies namely; US dollar, pound sterling, Euro,
Australian dollar, Japanese Yen and Canadian dollar.

FCNR accounts can be opened for a minimum period of one year and maximum period of three years
10. What are the traditional functions of RBI?

The traditional functions of RBI are issue of currency, forex management, export assistance,
clearing house functions, change of currency, transfer of currency, publication of statistics and other
information and training in banking.

What do you mean by financial inclusion, no frill accounts, narrow

banking, business facilitators and business correspondents?

01. What do you mean by financial inclusion?

In spite of vast growth in the banking system, a large number of poor people are found not served by
any banking services.

They are living outside the purview of any bank.

Financial inclusion is delivery of financial services at an affordable cost to the vast population of
disadvantaged/low income sections of the society
02. What do you mean by No frill accounts?

No frill accounts are accounts with very low or nil minimum balance to be opened by the banks as
targeted by Reserve Bank of India.

KYC norms are relaxed for opening no frill accounts so that people living in rural and semi urban areas
can open the accounts conveniently.

Overdrafts up to an amount of Rs. 25000.00 are allowed in no frill accounts.

At present no frill accounts are named as BSBDA accounts

03. What do you mean by narrow banking?

It is the system of banking under which the bank accepts deposits from the public and places the
funds accepted in 100 percent risk free assets with maturity matching for its liabilities.

The bank takes no risk of lending at all.

04. Who are business facilitators and business correspondents?

RBI has permitted the banks to use the services of business facilitators and business correspondents
with effect from 2006.

The services of nongovernmental officers, microfinance institutions and civil society organizations can
be utilized by the banks.

They help the banks in identifying the borrowers processing their applications etc. without involving in
business transactions.

No approval of RBI is necessary.

Correspondents will do all the above and will also participate in business transactions in a small way.
05. What do you mean by non performing assets?

Non performing assets mean loans which have become bad(unrecoverable)

The following are considered as non performing assets: A loan account where the principal is not paid
for more than ninety days; A loan account where the interest is not paid for more than ninety days or
a loan account where both principal and interest are not paid for more than 90 days.
Non performing assets are classified into sub standard assets, doubtful assets and loss assets.
All performing assets are called as standard assets
When the account is identified as non performing asset, it is termed as sub standard asset
When no repayments are forthcoming in a substandard asset for twelve months and more, the
account is treated as doubtful assets provided sufficient securities are available and it is treated as
loss asset, when sufficient security is not available
Banks are willing to keep the level of non performing accounts at the lowest.

06. What are the major risks faced by banks according to Basel II norms?

Banks are facing credit risk, market risk, operational risk, liquidity risk and interest rate risk.

When the bank lends an advance, it faces credit risk and sometimes the banks may not be able to
recover the loan amount from the borrowers.

When a bank introduces any new deposit scheme, loan scheme or any other scheme, despite effective
promotional campaigns, the bank may not be able to market the products to the expected level and it
is called as market risk

Employees on strike, staff unrest, failure of computers, non availability of internet connectivity, non
functioning of automated teller machines etc., lead to operational risk

Any increase in rate of interest charged to loan accounts or decrease in rate of interest offered to
deposit accounts leads to interest rate risk.

A branch of a bank may not be able to deliver cash to a customer in case of shortage of cash at the
branch and this leads to liquidity risk for the branch
07. What do you mean by merchant banking?

Merchant banking stands for provision of various services to corporate clients by helping them to
access capital market.

Merchant banks help the corporate customers to approach the capital market with initial public offers
for the purpose of collection of capital by way of shares.
08.

What do you mean by demat accounts?

Demat means dematerialization.
Before some years, share certificates and debenture certificates were issued in physical form.
At present, they are issued in electronic form.
The electronic issue of share certificate and debenture certificate is called as demat account
It is the process by which paper securities are converted into electronic form so that they can be
stored, sold and transferred easily.

09. What is a depository?

A depository holds the securities of the investors in electronic form.

In our country there are two depositories namely; NSDL National Securities Depositories Limited
promoted by National Stock Exchange and CDSL Central Depository Services Limited promoted by
Bombay Stock Exchange.
10. What do you know by consortium financing?

When a company or a firm is in need of huge finance it approaches more than one bank for providing
the finance and when two or more banks join together and extend the loan facilities by sharing the
loan amount between themselves, it is called as consortium financing.

This reduces the risk for each bank. The banks jointly process the application of the borrower and
sanction the advance

The bank which provides more finance is called as the leader of the consortium and the leader is
responsible for coordinating the members of the consortium in sorting out the nature of limits, rate of
interest to be charged, securities to be charged etc.,

What do you mean by bankassurance, universal banking, Regional

Rural Banks, National Housing Bank ?

01. What do you mean by bankassurance?

Hitherto banks were dealing with acceptance of deposits and lending loans to the customers apart
from undertaking certain ancillary services.

Nowadays banks started selling insurance policies of prominent insurance companies by having tie up
arrangements with such companies and banks earn commission for such transactions.
02. What do you mean by Universal banking?

Universal banking is the concept under which banks can provide various types of services namely;
deposits, loans, safe deposit lockers, safe custody services, selling mutual fund products, selling
insurance policies, selling gold coins, dealing with issue of shares and debentures etc.

Thus at present banks are functioning like a supermarket for all kinds of financial products and such
concept is called as universal banking.
03. What do you mean by Regional Rural Banks?

The Regional Rural Banks are relatively new banking institutions which were added to the Indian
banking System since October, 1975.

The distinctive feature of a rural bank is that though it is a separate body corporate with perpetual
succession and common seal, it is very closely linked with the commercial bank which has sponsored
the proposal to establish it.
04. What do you mean by National Housing Bank?

National Housing Bank was established under the National Housing Bank act, 1987 as an apex body
and the key function of National Housing Bank is the development of the housing sector and it is a
wholly owned subsidiary of Reserve Bank of India.

National Housing Bank undertakes the following activities namely; promotion and development of
housing finance companies; regulation and supervision of housing finance companies and providing
both direct finance and indirect finance to housing sector.
05. What do you mean by NABARD?

National Bank for agriculture and rural development was set up in 1982 as an apex development bank
in the field of agricultural finance and rural development.

NABARD is set up by the Government for the purpose of facilitating credit flow for promotion and
development of agriculture and integrated rural development.

It covers supporting all other allied economic activities in rural areas, promoting sustainable rural
development and ushering in prosperity in the rural areas
06. What do you mean by EXIM Bank?

Export and Import Bank of India was set up during the year, 1982 for the purpose of financing,
promoting and facilitating foreign trade in the country.

It is wholly owned by Government of India.

The bank apart from enhancing exports from the country, integrates the countrys foreign trade and
investment towards overall economic growth.
07. What do you mean by SIDBI?

SIDBI was established for the purpose of assisting and promoting small scale industry.

It was established on 2.4.1990.

It is the principal financial institution established for the purpose of promotion, financing and
development of industry in the small scale sector and to coordinate the functions of the institutions
engaged in the promotion and financing or developing industry in the small scale sector.

08. What do you mean by NBFC?

Non Banking Finance Companies provide finance for small ventures but at the same time they are
more customer oriented and operate at low volumes compared to the banks.

They also collect deposits from customers and offer slightly higher interest rates on deposits
compared to the banks.

NBFCs can accept term deposits only and they are not permitted to accept deposits namely; current
and savings in other words, they are prohibited to accept deposits which are repayable by means of
cheques
09. What do you mean by NEFT and RTGS ?

The two options namely NEFT called as National Electronic Funds Transfer and RTGS called as
Real Time Gross Settlement offered by Reserve Bank of India allow electronic transfer of funds from
the remitter who has an account in one bank to the beneficiary who has an account with any other
bank/branch.

The transfer can be carried out by using the internet banking facility.

The minimum amount that can be transferred by RTGS is Rs. 2.00 lakhs and there is no such limit for
transfer through NEFT.

It is settled in batches at times defined by the Reserve Bank of India.

RTGS transactions are settled continuously as and when they are put through. The transfer of funds
through NEFT and RTGS can also be carried out by submitting the remittance form at the remitters
bank branch.
10. What do you mean IFSC code?

IFSC means Indian Financial System Code. It is one eleven digit code used to identify the bank
branch.

IFSC code is used while transferring the funds using anyone of the following online remittance modes:
RTGS or NEFT

IFSC is alphanumeric code consisting of eleven digits

The first four digits consist of alpha characters pertaining to the name of the bank

The fifth digit is 0 and it is called as control number

The last six digits pertain to the code number of the bank branch

Normally banks demand IFSC codes of receiving branch of the bank while remittances are made using
NEFT or RTGS

What do you know by debit card, credit card, stale cheque, post dated
cheque, currency chest and MICR?

01. What do you know by debit card?

They are cards issued by the banks on current and savings accounts.

Using debit cards, the customers can withdraw funds through automated teller machines or they can
purchase goods through point of sale terminals situated at textile shops, petrol pumps, hotels and
other outlets.

The cards can be also used for purchasing e-tickets, air tickets, payment of taxes and many more.
02. What do you know by credit card?

Credit cards are post paid cards whereas the debit cards on the other hand are called as prepaid cards
with some stored value.
When a person starts using the card through any ATM machine or through any merchant
establishment, the internet banking house gets money transferred to its account from the bank of the
buyer.

03. What do you know by stale cheque?

When the cheque becomes out of date and cannot be encashed, it is termed as stale cheque.

At present, the validity period of any cheque is three months and when a cheque dated: 10.01.2015 is
presented for payment on 11.04.2015, it is considered as a stale cheque, since the cheque is more
than three months old.

When such cheques are presented to the banker, they used to return the cheques with the reason
stale cheque
04. What do you mean by post dated cheque?

When the date of the cheque is beyond the date on which the cheque is presented for payment, the
cheque is considered to be post dated.

For example, when a cheque dated: 11.12.2014 is presented for payment on 10.12.2014, it is
considered to be a post dated cheque.

Bankers return such cheques with the reason post dated cheque
05. What do you know by currency chest?

Currency chests are operated by RBI so that they can provide good quality currency notes to the
public.

However, RBI has appointed commercial banks to open and monitor currency chests on behalf of RBI.

The cash kept in currency chests is considered to be the cash kept with Reserve Bank of India.

CRR called as cash reserve ratio is mandatory for all commercial banks and as per Cash Reserve
Ratio, every bank is required to maintain certain portion of their cash holdings with RBI at present
CRR is 4 % p.a.

CRR is calculated as the percentage of net demand and time liabilities of any bank as on a particular
day.

The net demand and time liabilities mean total deposits comprising of demand deposits and time
deposits of the bank as on a particular date

The total amount kept in the currency chests of one bank can be considered for maintenance of CRR
since the cash kept in currency chests is considered to be kept with RBI
06. What is meant by minimum balance to be maintained in the accounts?

In the case of savings bank deposits and current account deposits, the banks stipulate a minimum
balance to be maintained.

The minimum balance varies from one bank to another bank and when the balance in the account
falls below the minimum balance then banks debit the account with some penal charges.

Some banks insist maintenance of quarterly average minimum balance instead of monthly minimum
balance.
07. What do you mean hindu undivided family?

HUF means Hindu Undivided family and it is the legal entity duly recognized by the laws in India.

The accounts in respect of hindu undivided family is operated by Karta and the karta is the seniormost
male member in the family.

The remaining members in the family are called as coparceners.

Banks can open deposit accounts and also extend loan facilities to hindu undivided family.

More tax incentives are available for accounts in the names of hindu undivided family
08. What do you know by MICR?

MICR means magnetic ink character recognition.

Nowadays, the cheques are issued in MICR formats in centres namely; Mumbai, Chennai, Kokatta,
Bangalore etc.
The MICR code is readable by a reader sorter computer which helps in quick sorting of the cheques
towards immediate adjustment of the amount to be received and paid by the banks in the clearing
house.
The bottom portion of the cheque/demand draft is treated as MICR band and it contains cheque
number, MICR code and account code printed using magnetic inking technology
MICR code consists of nine numerical digits namely; name of the city, name of the bank and name of
the branch.
Banks simply type the amount of the cheque in the MICR portion using scanners which can read
magnetic printing so that the sorter reader is able to read the entire information in regard to the
cheque instantaneously.
MICR code represents the following: the first three digits represent the centre/city in which the
branch has been established the middle three digits represent the name of the bank and the last
three digits represent the name of the branch

09. What do you mean by cheque truncation?

Under cheque truncation process, the physical cheque is replaced by the digital image of the cheque
after scanning.

Once the cheque is truncated the physical cheque is treated as cancelled and kept in the records of
collecting bank and from the moment of truncation only the digital image has life.

The digital image of the cheque which contains the digital signature of a bank officer as to its
authenticity is processed by all banks and payment is made.

Cheque truncation helps in quick processing of the cheques drawn even on distant places since there
is no necessity to physically move the cheque from one place to another place.
10. What do you mean by ECS?

ECS means electronic clearing service and this facility is used where a large number of small value
payments or receipts are to be made or received.

ECS can be used for either debit transactions or credit transactions.

When a company wants to pay dividends to a large number of shareholders, they use ECS credit
facility and by debiting the companys account by the required dividend amount, the shareholders
accounts are credited instantaneously.

Similarly an accountholder can use ECS debit facility towards effecting payment to telephone charges
or electricity charges on periodical basis

What do you mean by treasury bill?

01. What do you mean by Treasury bill?

They are money market instruments to finance the short term requirements of central government
and state governments in the country.

There are different types of treasury bills based on the maturity period and utility of the issuance
namely; 14 days treasury bills, 91 days treasury bills, 182 days treasury bills and 364 days
treasury bills etc.

14 days treasury bills are available on all Fridays and the notified amount is Rs. 100 crores

91 days treasury bills are available on all Fridays and the notified amount is Rs. 100 crores

182 days treasury bills are available on alternate Wednesdays which is not a reporting week and the
notified amount is Rs. 100 crores

364 days treasury bills are available on alternate Wednesdays which is a reporting week and the
notified amount is Rs. 500 crores
02. What do you know by certificate of deposits?

It is a negotiable short term promissory note in nature.

It is issued by commercial banks and financial institutions for subscription by the public towards
meeting their fund requirements
It is issued at a discount to the face value, the discount rate being negotiated between the issuer and
the investor.
Certificate of deposits are issued for a period of 90 days to one year
Regional Rural Banks and Local Area Banks are not eligible to issue certificate of deposits

03. What do you know by commercial paper?

Commercial papers are negotiable short term unsecured promissory notes with fixed maturities issued
by well rated organizations.

These are generally sold on discount basis.

Organizations can issue commercial papers either directly or through banks or merchant bankers
called as dealers.

Commercial papers are freely negotiable by endorsement and delivery

The minimum maturity period is 7 days

The minimum credit rating should be P+ awarded by CRISIL (Credit Rating Information Services of
India Limited)
04. What do you know by primary market?

Primary market deals with new issues of shares, debentures or securities which are issued to the
public by companies, government and financial institutions.

The new offerings by the companies are made through an initial public offer to the public or rights
issue of shares to the existing shareholders.

It is also called as new issues market

05. What do you know by secondary market/stock exchange?

It is the market for buying and selling of securities of the companies whose shares and securities are
listed in any stock exchange.

Under this scheme, securities are traded and are initially offered to the public in the primary market
and listed on the stock exchange.

The secondary market dealings are done through the share brokers attached to the stock exchanges
which are available in important cities in the country and the public can purchase the shares at the
prevailing market rate in respect of companies listed in the stock exchange.

The shareholders can also sell their shares through stock exchanges
06.

What do you know by the term called as savings bank branch?

It is one unit of a commercial bank whose primary purpose is to accept savings deposits.
It may also perform some other functions.
These banks are much helpful for salaried people and low income groups.
The deposits collected from the customers are invested in bonds, securities etc.

07. What do you know by commercial banks?

It is a banking institution which accepts deposits, provides business loans and offers related services.

The commercial banks also allow for a variety of deposit accounts such as checking, savings and time
deposits.

The main purpose of any commercial bank is to make a profit.

Commercial banks apart from acceptance of deposits and lending of loans, provide services like
collection of cheques and bills of exchanges, remittance of money from one place to another place etc.
08. What do you know by industrial banks and development banks?

They are development banks engaged in promotion and development of industry.

SIDBI is a development bank engaged in helping the industries in getting loans from public sector and
other banks.

NABARD(National Bank for Agriculture and Rural Development) caters to the needs of agriculture and
National Housing Bank is meant for helping housing development.
EXIM bank helps in the area of import and export development in the country.

09. What do you know by indigenous banks?

Indigenous banks mean money lenders and sahukars.

They collect deposits from the general public and grant loans to the needy persons out of their own
funds as well from deposits.

They are much popular in villages and small towns.

10. What are the different types of loan facilities provided by commercial banks to the
customers of the banks?

Cash credits, overdrafts, term loans and discounting of the bill of exchange are various loan facilities
provided by any bank.

Cash credits are loans granted against stock of goods.

Overdrafts are clean loans granted in current accounts.

Cash credits and overdrafts are provided over and above the balance maintained in current accounts

Loans which are repayable in monthly or quarterly instalments are called as term loans and term
loans are housing loans, educational loans, consumer loans, gold loans, other agricultural loans,
industrial loans etc.

Loans are also provided in the form of supply bills, bills discounted or bills purchased against
receivables or book debts

What do you know by call money, notice money and term money?
01. What do you know by safe custody service?

According to the scheme meant as Safe custody service, customers can safe keep their valuables
with the banker for nominal service charges.

The valuables are kept in sealed packets or bundles or boxes and handed over to the banker and the
banker on receipt of the packet or bundle, provides a receipt as an acknowledgment slip and when the
customer is in need of the packet or bundle, he has to produce the receipt to the banker.

For the service provided by the bank, the bank collects appropriate service charges
02. What do you know by a proprietorship account?

When a customer maintains an account in his personal name, it is called as individual account and
when he opens an account in the name of a firm owned by him, it is called as proprietorship account.

For example, Mr. Balaji may be doing printing business by having a printing press and he might have
invested the capital for the printing business on his own without depending upon any other person and
in such a case, he is called as a proprietor and he can open a current account in the name of Balaji
Printing services and this is a proprietorship account opened for business purposes.

A proprietorship firm can open current account, fixed deposit, recurring deposit and reinvestment
deposit.

A proprietorship firm cannot open savings bank account with the bank; however, the proprietor in his
personal capacity can open a savings bank account.
03. What do you know by a partnership account?

When more than one person joins together to conduct a business, it is called as a partnership firm
and the partners invest the capital either on equal sharing basis or according to the terms as agreed
between the partners.

The sharing of profit from the business amongst the partners is done as per the partnership deed.

The rules and regulations of the business are recorded in a partnership deed.

The partnership deed can be registered with the Registrar of Partnership firms

When the customer opens an account in the name of the partnership firm, he has to produce the copy
of partnership deed to the bank.
A partnership firm can open current account, fixed deposit, recurring deposit and reinvestment
deposit account.
A partnership firm cannot open savings bank account with the bank; however, the partner in his
personal capacity can open a savings bank account.

04. What do you mean by crossing of the cheque?

Two parallel transverse lines drawn on the face of the cheque on top left hand corner with or without
any words between the two lines is called as crossing.

When two simple transverse lines are drawn, it is called as general crossing and when the name of
any banker is mentioned between the two parallel lines, it is called as special crossing.
05. What is the purpose of crossing of the cheque?

Cheques are crossed so that the payees can get the payments through accounts only.

This is for the purpose of avoiding fraudulent encashment of cheques by the miscreants over the
counter.

When the cheque is found to be crossed generally, it has to be credited to the account of payee with
any bank

When the cheque is found to be crossed specially, it has to be credited to the account of payee with
the bank mentioned in the cheque only and not through any other banks.
06. What do you know by order cheque?

Normally the cheques are payable to the person mentioned in the cheque or to the bearer.

In the case of uncrossed bearer cheque, the person named in the cheque or any bearer can get
payment of the cheque from the bank counter.

When the word, bearer printed in the cheque leaf is cancelled, the cheque is treated as an order
cheque and for encashing an order cheque, the customer has to prove his identity to the banker.

For this purpose he can produce an identity card issued by his employer, driving license, Pan Card,
AATHAAR card etc.,
07. What do you know by shares?

For the purpose of mobilizing funds for the operation of the company joint stock companies want to
bring in capital and for this purpose they approach the public to become the investors(owners) in the
company by purchasing shares and the joint stock companies are authorized to issue shares to the
public.

Shares can be issued in the form of ordinary shares or preference shares.

Ordinary shareholders are entitled to voting rights during the annual general meetings and they do
not have any predetermined dividend amount and in the case of preference shareholders, they are
paid dividends according to predetermined rates.
08.

What do you know by Debentures?

It is a sort of loan document.
Those who advance loans to the company are called as debenture holders.
Normally debentures are issued through initial public offer as in the case of shares.
Interest calculated at predetermined rate of interest is paid to the debenture holders, whether the
company earns profit or incurs loss.

09. What do you know by SEBI?

Securities and Exchange Board of India is the principal regulator for the capital market in the
country both under the primary and secondary segments.

It has also been conferred with the powers to regulate the mutual funds and venture capital funds in
the country.

10. What do you know by call money. notice money and term money?

It is an important segment of the Indian Money Market.

Under call money market, funds are transacted on overnight basis and under notice money market,
funds are transacted for the period between 2 days and 14 days.

In the case of term money, funds are borrowed for more than fourteen days.

Banks borrow in these markets in order to fill the gaps or temporary mismatches in funds to meet
the cash reserve ratio and statutory liquidity ratio and to meet the sudden demand for funds arising
out of large outflows.

Banks, primary dealers, development finance institutions, insurance companies and select mutual
funds are participants in this market.

What do you know by commercial banks?

01. What do you know by commercial banks?

Commercial banks are banks which function for profit and the following banks are included under the
category of commercial banks by RBI State Bank and its subsidiaries, all nationalized banks, all
private sector banks and foreign banks.

The cooperative banks and regional rural banks are not treated as commercial banks since their
activities are limited.
02. What do you know by the term called as cheque book?

Cheque books are issued when the customer is having a current deposit account, savings deposit
account or overdraft account.

Cheque books are issued for the purpose of withdrawal of money from the account.

Cheques are not issued in the case of term deposits namely; fixed deposit, reinvestment deposit and
recurring deposit.

In the case of fixed deposits and reinvestment deposits, the customers are issued with deposit
receipts mentioning therein the details of deposits.

In the case of recurring deposit, the customers are issued with pass books
03. What do you know by the minimum balance criteria?

When a customer is maintaining a current deposit account and savings deposit account, he is
expected to maintain the required minimum balance in the account.

The minimum balance is prescribed by the respective banks.

When the balance available in the account falls below the minimum balance prescribed by the bank
during any day, penal charges are levied in the account.

In the case of zero balance accounts permitted for certain category of customers, this minimum
balance category is not applicable
04. What do you know by automated teller machines?

Automated Teller Machines are used for the purpose of allowing the customer to withdraw money
twenty four hours a day.

The following services are available through automated teller machines namely Facility of cash
withdrawal, balance enquiry, mini statement up to last ten entries, pin number change, mobile
recharge, e-ticketing, transfer of funds etc.
05. What do you know by TDS?

TDS is called as tax deducted at source.

As and when tax is deducted from the interest paid on deposit accounts, banks used to issue TDS
certificates to the depositors so that the depositors can furnish the details while submitting their
income tax returns

When a customer having a fixed deposit account or reinvestment deposit account earns interest
amount more than Rs. 10000/- per year tax is deducted at source from the account according to
income tax laws prevalent in the country.
The tax deducted at source is directly remitted by the bank to Income tax authorities on behalf of the
depositor

06. What do you know by core banking solution?

According to core banking solutions, all branches of all banks are interconnected through a common
server and a customer can transact the business in his account from anywhere in the country.

For example remittances can be made from an account of one bank to another account of another
bank
07. What do you know by real time gross settlement?

According to RTGS, a customer can send an amount of Rs. 200000/- and more from his account to
any other account of another person having his account with the branch of the same bank or any
other bank.

For example, a customer having an account with Canara Bank, Kellys branch at Chennai can transfer
the amount to the account of his father with State Bank of India, Canning Street, Kolkatta.

Banks collect appropriate service charges for such remittance transactions.

08. What do you know by either or survivor condition?

When an account is operated by more than one individual, it is called as a joint account.

Since the account is opened jointly by more than one person, the account holders should specify the
conditions for operation of the account to the banker.

In the case of E or S account (Either or survivor account), anyone of the customers can operate the
account individually.

In the case of joint accounts having the condition: Operation jointly, all account holders should
operate the accounts jointly.
09. What do you know by safe deposit locker facility provided by commercial banks in our
country?

It is a facility provided by the banks for safekeeping the valuable articles.

Lockers are available in different sizes and according to the size of the locker and the period of lease,
charges are collected from the customers

The lockers are operated by the locker holders and the banker simultaneously and for this purpose,
the customer is given one key pertaining to the locker and the banker is having the master key for the
entire unit.
10. What do you know by nomination facility in the account?

Nomination facility is available for all deposit accounts namely; current account, savings account,
fixed deposit account, reinvestment deposit account and recurring deposit account.

The depositor nominates a person to receive money held in the deposit account on his death.

Nomination facility is also available for safe deposit lockers and safe custody service facility also

Nomination facility is available for Non resident accounts also

Nomination facility is available for accounts maintained by individuals only

Nomination facility is not available for the accounts maintained by partnership firms, companies,
trusts, charitable institutions, associations and clubs.

Whether the deposits can be opened in the name of any minor in

commercial banks?
01. Whether deposits can be opened in the name of any minor?

Yes, deposits can be opened in the names of minors.

The account should be opened in the name of the minor duly represented by his father or mother and
they are called as natural guardians.
When the minor is aged more than ten years old and is a literate he can open an account and operate
the account himself without depending upon his natural guardians.
In the case of accounts operated by minor himself, nowadays banks provide pass books, and debit
cards (ATM cards).

02. Whether a minor is eligible for loans ?

Loans should not be granted to minors as per law and the loans granted to the minors are considered
void and cannot be recovered from the minors even by means of any legal steps.
03.

What do you know by PIN number?

PIN means personal identification number
PIN number is a four digit number provided in the form of numerical characters
PIN number is used by the customer when he is utilizing his credit card or debit card through any ATM
machines or point of sale terminals
In the case of biometric ATMs exclusively meant for illiterate customers, instead of PIN number, body
parts namely; left hand thumb impression, eye retina or voice recognition is used. In our country Left
hand thumb impression is an accepted mode of operation in biometric ATMs

04. What do you know by bank nationalization?

As much as fourteen banks owned by private establishments were nationalized on 19.7.1969 during
the first phase so that the banks can better fulfill social obligations.

During the second phase, six banks were nationalized on 15.4.1980.

Subsequently, New Bank of India merged with Punjab National Bank and as at present there are
twenty one public sector banks including IDBI bank and Bharathiya Mahila Bank which was opened
during the year 2013
05. What do you know by a foreign bank?

Foreign banks have their headquarters in a foreign country; however, they are doing banking business
through their branches in India as permitted by Reserve Bank of India.
06. What do you know by private sector banks?

At present there are thirteen old private sector banks and eight new private sector banks in our
country namely; Axis bank Limited, Development Credit Bank Limited, HDFC Bank Limited, ICICI Bank
Limited, Indus Ind bank Limited, Kotak Mahindra Bank Limited, Yes bank Limited and Bandhan Bank
Limited.

Bandhan Bank Limited is the recently opened bank in our country.

According to the revised norms fixed by Reserve Bank of India, the new private sector banks should
have a minimum capital base of Rs. 200 crore.
07.

What do you know by central bank?

Central bank is the bank which supervises all other banks in the country.
In our country, RBI is the central bank.
Reserve Bank of India has its headquarters at Mumbai and the following are the functions of RBI
namely issue of currency notes, banker to the banks, financial adviser to the government, custodian
of cash reserves of banks, lender of the last resort and controller of credits etc.

08. What do you know by issue of currency notes in the country?

In our country, one rupee currency note is issued by Government of India and the remaining
currency notes namely; Rs. 2/- to Rs. 1000.00 apart from the coins are issued by Reserve Bank of
India.

However, the management of entire currency in the country is done by RBI only.

The currency notes are available in the following denominations: Rs. 1, 2, 5, 10, 20, 50, 100, 500 and
1000

Apart from the above, RBI is also having licence to issue currency notes in the denominations of Rs.
5000 and Rs. 10000

One rupee note is signed by the Secretary, Ministry of Finance, Government of India

Rs.2/- to Rs. 1000/= currency notes are signed by Governor, Reserve Bank of India
09. What do you know by demonetisation of currency notes in the country?

Recently Reserve Bank of India has decided to demonetize currency notes issued prior to 2005

This decision has been taken by RBI to curb issue of fake currency notes in the country

However, the currency notes can be considered to be the legal tender till such time RBI issues
instructions to that effect
10. What do you know by scheduled commercial banks?

Nationalised banks in the country, State Bank of India and group banks, Regional Rural banks, all
private sector banks and foreign banks are called as scheduled commercial banks.

They are included in the second schedule of RBI act 1934.

They get licenses for conducting banking business as per Banking Regulation act, 1949

They function either as a company registered as per Indian Companies act, 1956 (presently Indian
Companies act 2013) or as a cooperative unit registered as per state or central cooperative societies
act.

What are the functions of any bank?

01. What are the functions of any bank?

The basic function of any bank is to accept deposits from the public for the purpose of lending loans to
the public and invest in securities.

Acceptance of deposits and lending loans are called as the primary functions of any bank

The secondary functions are selling gold coins, insurance products and mutual fund products. Apart
from the above the banks open demat accounts and undertake remittance services namely; issue of
demand drafts, online remittance facilities like RTGS and NEFT etc.,

The banks also provide safe deposit locker facilities and safe custody services to the customers.
02. Which are called as public sector banks in our country?

State Bank of India and subsidiary banks, Regional Rural Banks and Nationalised banks are termed as
public sector banks in our country

In respect of the abovementioned banks, the major share holding is held by Government of India and
Government shareholding should not be less than 51% at any point of time.
03. How many subsidiaries are available in State Bank group as of now?

State Bank of India is called as the parent bank for the group

As on date, there are five subsidiary banks when it comes to SBI and group banks

The five subsidiary banks of State Bank of India are - State Bank of Patiala; State Bank of Hyderabad;
State Bank of Travancore; State Bank of Bikaneer and Jaipur and State Bank of Mysore
04. What do you know by demand deposits?

Current deposit account and savings deposit account are called as demand deposits. In the case of
demand deposits, money can be deposited at any time and at the same time it can be withdrawn from
the account using cheques or debit cards.

Current and savings accounts are collectively called as CASA accounts

Current account is opened for business purposes carrying no interest

Savings account is opened for the purpose of saving the personal money and it carries interest. The
interest is at present decided by respective banks.

Interest earned in savings deposit account for more than Rs. 10000.00 is taxable
Income Tax guidelines as at present.

according to

05. What do you know by KYC guidelines?

KYC means Know Your Customer guidelines. According to the guidelines issued by RBI, banks insist
KYC as an antimoney laundering tool.

According to KYC guidelines, the bank demands address proof and identity proof from the public when
they open deposit accounts with the bank.

For address proof copies of anyone of the following namely; Driving licence, voter ID card, AATHAAR
card, telephone bill, Passport etc. are obtained.

For identity proof, copies of identity cards issued by the employers, voter ID card, driving licence,
AATHAAR card, PAN Card etc. are obtained by the bankers.
06. What do you know by term deposits?

Fixed deposits, recurring deposits and reinvestment deposits are called as term deposits since these
deposits are opened for a specific period

The minimum period for which the term deposit can be opened is 7 days and the maximum period is
10 years.

Interest is paid according to the period of deposit. Interest is decided by the respective banks only.

Reserve Bank of India has no control over the interest payable in term deposits by the banks
07.

What do you know by fixed deposit?

Fixed deposits are opened for a minimum period of seven days and maximum period of ten years.
Interest is paid according to the period of deposit.
The interest rates are decided by respective banks
In this scheme, a lump sum amount is deposited for a fixed period and interest earned is obtained
from the bank on quarterly basis.
According to the specific request from the depositor, banks pay interest on monthly, half yearly and
fortnightly basis also.

08. What do you mean by recurring deposit?

According to this scheme, the customer can remit monthly or quarterly a fixed amount for a fixed
period.

This scheme is suitable for persons who are earning regular income like salary, pension etc., and the
depositor can save regularly for a specific period and at the end of the period they can withdraw the
amount along with interest

They can utilize the maturity amount for educational, marriage, house construction and for many
other useful purposes

For example, an amount of Rs. 1000/- per month can be deposited for 60 months and interest is paid
to the depositor according to the period of the deposit along with the principal amount on maturity of
the deposit. In this case, at the end of five years, the customer is able to get Rs. 60000.00 apart from
interest.
09. What do you know by reinvestment deposit?

Reinvestment deposit scheme is another form of fixed deposit.

In the case of fixed deposit, the interest is paid quarterly by default and instead of getting the interest
on monthly or quarterly basis, the customer can get the interest on maturity along with principal
amount.

Since the depositor is not willing to get the interest on quarterly basis, the interest payable to the
customer is reinvested by the bank and for such reinvestment, additional interest is paid at the time of
maturity along with normal interest.

For the same amount deposited for the same period, the depositor gets more interest in reinvestment
deposit account than fixed deposit account
10. What do you know by PAN number?

PAN number is required for Income Tax purposes

PAN number is a ten digit number and any individual can get PAN number by sending an application
to the income tax authorities through designated agencies
When more than Rs. 50000/- is invested in time deposit accounts by means of cash
or remitted in current or savings deposit accounts by cash, the remitter has to mention his PAN
number in the remittance slips.
Commercial banks collect TDS at the rate of 20 percent in respect of interest payable on term
deposits in the absence of PAN number and when the PAN number is provided by the depositor, they
collect TDS at the rate of 10 percent.

What do you mean by real investment trusts?

A real estate investment trust is very similar to a mutual fund.

It invests in real estate properties, passing on the income and/or profits to the investors.
They are very popular real investment vehicles in some of the developed countries and also
very liquid.
In our country, the government and the regulators are still trying to put in place the right
structure with the right tax treatment that is best suited to the investors.
There are several types of real estate investment trusts namely equity, mortgage and
hybrid.
Equity real estate investment trusts invest in real estate projects and take a stake in those
properties.
The returns after the close of the projects are passed on to the investors.
Mortgage real estate investment trusts invest in real estate properties that generate rental
income and pass on the money to the investors.
Hybrid real estate investment trusts as the name suggests invest part of their money in real
estate projects and take a stake and the other part in income yielding projects like
mortgage real estate investment trusts

Tips for Interview for recruitment as clerks and officers in banks

Instructions to candidates
The purpose of the interview:
The purpose of any interview is to select one suitable person for the concerned post. The person to be
interviewed may be having better qualifications; however, he may not be having the requisite
potentials or caliber in handling the job offered namely; better communication ability, leadership
quality, emotional strength and deficient interpersonal relationship. Banking demands people who are
willing to work hard by mingling with customers freely and friendly apart from maintaining a cordial
and friendly relationship with their colleagues and superiors.
Phases of the interview:
The interview is conducted in four phases namely;

the first phase during the course of which questions are asked about the person and his specialization
in any area;

the second phase wherein questions are asked about the bank for which the interview is conducted;

the third phase wherein questions on general banking, economy, finance and latest developments are
asked and

the fourth phase is the final round for the interview.

The interview committee:
The interview committee consists of three to five imminent personalities who are well versed in
banking matters and normally the services of executives or retired executives of various public sector
banks are utilized for the purpose of conducting the interview. The following system is adopted by the
committee members during the interview process:

While one member poses questions to the candidate, the other two members analyze the body
language of the individual as to how he reacts to the questions and especially in respect of difficult
questions;

They also review as to how the candidate comes forward to present the answers in a crisp manner
providing the relevant points expected by the committee members.

Basing upon the answering ability, communication ability, level of confidence, willingness to accept
challenges etc., the committee members select the individual by awarding better grades.

When the candidate is found to be inattentive on account of low level of self confidence, the
committee members pose provoking questions so that the candidate is emotionally provoked to come
forward with appropriate answers.
The interview process:
The interview process consists of the following stages:

Verification of the certificates namely; qualification certificates, experience certificates, certificates

relating to extracurricular activities etc., by the team members and filling up of the requisite formats
by the candidates;

Candidates waiting at the reception hall for their turn;

Candidate entering the interview room duly seeking permission of the team members;

Candidate thanking the interview members for permitting him/her inside the cabin;

Candidate sitting on the seat once offered by one/more members in the interview committee;

Candidate thanking the person who had offered the seat;

Candidate shaking his hand with the members, if offered;

Candidate eagerly awaiting for the questions from the members;

Candidate trying to attend the interview with full concentration maintaining regular eye contact with
the interviewers;

Candidate answering the questions posed by the members till the entire process is treated as
completed;

Candidate collects all certificates and documents once the interview is treated as completed;

Candidate thanks the committee members and

Candidate politely getting from the chair, walks towards the entrance, opens the door and gently
closes the door;

Candidate meets other candidates awaiting at the reception hall cheerfully.

Dress code:

Dress code is more important and a person is judged by the dress he wears. Dress makes half man.

For men: Please wear a neat trouser and full length shirt preferably white or light shaded; Usage of
T shirts greatly dampens the image of the candidate and the purpose of using any T shirt is to
have better comfort during the course of walking, relaxing, jogging, running, partying and relaxing.
As such T shirts are not considered to be a fit wear during professional meetings including
interviews. The candidate has to wear a good quality shoes neatly polished. If possible he can wear a
tie and this is purely optional and certain organizations pay more attention to the personality which
gets improved by way of better dressing.

For girls: Under any circumstances girls should not wear provoking dresses namely; T shirts, jeans
pants, trousers, half gowns and shirts with messages and blouses with low cuts. A neat chudithar is
considered to be the best option and wearing of sarees improves the image of the individual.

A. Questions during the first phase:

Initially the candidates are invited to tell about themselves, their family members, their ambitions,
their qualifications, their achievements in studies, sports, music and any other extracurricular
activities;

The second question is about the place to which the candidate belongs. In case the candidate belongs
to Chennai, he will be asked to tell about Chennai and the importance of the place. Necessarily the
candidate should have a thorough knowledge about the place from which he is hailing;

The interviewers will pose ice breaking questions in order to shift the focus of the candidate. This is
for the purpose of finding out the reaction of the candidate during such focus change. (Banks
demand people who are able to face any challenges);

During the first two to three minutes, more than 80 percent of the questions will be on the personal
details and basic information about the candidate. It has to be remembered that The
first impression is the best impression and accordingly the candidate has to behave politely,
calmly, courageously and confidently.
Sample questions during the first phase:

01. My dear friend, now tell us about yourself: The candidate has to inform in a crisp manner
about himself, his family, his qualifications, achievements if any etc. Unnecessary details should be
avoided altogether and the candidates at no cost should provide information with an intention to
derive sympathy from the committee members. Such an attitude will prompt the members either to
reject or award poor marks.

02. I see you are from Chennai please tell me about Chennai: Since the candidate belongs
to Chennai, he is invited to tell about Chennai and he should have pre-hand information about Chennai
and should come forward to tell about important places in Chennai namely; Marina beach, High Court,
Kabaleeswarar Temple, Metro train facilities, Santhome church, International airport, Asias biggest
bus station at Koyembedu and many more.

03.

college

find

that

you

had

studied

in

Presidency

college. Why

you

preferred

this

?. How was your life in the college? The candidate has to tell about the college;

the achievements of the college in academic scenario as well as in sports and in other areas;

04. I find that you had studied EEE - why you had chosen the course? The candidate has to
tell about the purpose and the potential available for the students when they had opted to pursue EEE
course.

05. You are in Chennai for a long period. What is your opinion about Chennai?

06. You are having EEE in engineering and why you are willing to get employed in
banking? (Your reply should be In fact by working in a bank, I can develop my relationship with

customers, improve my knowledge and provide service to as many people as possible. I find that I can
have more career prospects by getting employed in the banks)

07. What are your strengths and weaknesses? Your answer should be: I am always willing to
work hard under all circumstances and since I have a good communication ability, I hope that I can
surely develop friendship with colleagues, clients and others in a fast manner so that I can contribute
better.

08. You are a highly qualified person having one MBA degree apart from a degree in
Engineering subject. What is the guarantee that you will be in the bank for quite a long
period without shifting your attention to some other employment potential after some time
?: Your reply should not be: On account of unemployment problem, I am joining your bank ; Your
reply should be even though I have better qualifications, I wish to work in the bank because I can
have better opportunities to serve for the welfare of the society by working in the bank than any other
organisations.
Responsibilities of the candidate appearing for the interview:
The candidate should do a home work and he should always depend upon his positive straits namely;
his strength, achievements and abilities and necessarily he should believe in himself that he can
accept and do the job in a better manner and he should altogether avoid any negative reply or angry
reply under any circumstances; even when provoked or tempted by the interview board members and
the candidate should remain calm and wear a broad smile during the interview process.
A smile has the power to keep the person in better spirits at all times.
The following question may provoke the candidate

Dear friend, considering your personality, I find that you look like a film actor.

How do

you feel yourself ?

(You had not at all expected this question and you are tempted to provide an apt reply to
them: Your reply should be In fact I am fond of wearing a neat dress and I take care of my health by
doing physical exercises regularly apart from eating moderate food and getting into the bed at the
appropriate time. I always believe in the following proverb Health is wealth. An individual may not
be in a position discharge his duties properly without adequate health.
B. Second phase of the interview process:

During this phase, questions will be asked about the bank for which the candidate is appearing for the
interview and the following are some sample questions in case the candidate is appearing for a post in
Punjab National Bank:

Do you know where is the head office of Punjab National Bank?

Who is the present chairman of the bank?

How many branches are there in Punjab National Bank as on date?

Can you tell me about the total business of the bank?

Can you tell me about some deposit schemes available in the bank?

What do you know about the logo of Punjab National Bank?

What is the punchline of Punjab National Bank?

What is the position of Punjab National Bank among the nationalized banks as on date?
(It is the responsibility of the candidate to collect the basic information about the bank for which he is
appearing for the interview by visiting the website of the bank and referring other material sources in
order to get the required information about the bank namely; the headquarters, number of branches,
total business, profit position, important schemes, tie up with another banks, achievements of the
bank, if any; the present position and ranking of the bank in terms of business, profitability, non
performing assets, productivity of the employee etc., In case the candidate is appearing for a group of
banks, he should have information in general about all the banks in the group)

C. Third phase of the interview:

During this phase, questions will be asked on general banking practices as mentioned below:
The following are the questions regarding the banks in general:

Have you visited any bank branch? What was your experience ?

What is the business of any bank?

What are the essential/primary functions of any bank?

What are the secondary functions of any bank?

Who can open a savings bank account?

What do you know by KYC guidelines?

Why banks insist customers in adhering to KYC guidelines?

What is the difference between Current deposit account and Savings deposit account?

What do you mean by CASA account?

Who normally opens a current account?

What do you know by a fixed deposit account?

Can a company open a savings account?

Can the director of a company open a savings account?

Who is the controlling authority for the banks in India?

What is a foreign bank?

What is meant by a public sector bank?

Which is the largest private sector bank in the country?

Which is the largest bank in the country?

You are working as an officer in savings department. The customer complains about the irritating
behavior of the clerk who is working under your supervision. What will you do in this situation?

Your manager delegates some work and you are failing in doing the work within the allotted time and
your manager is not happy with your performance. How will you convince your manager?

Today there is some news about annual credit policy. What do you know by that?

What do you know by reverse repo rate?

What is called as inflation?

What is rupee convertibility?

What do you know by gross domestic product?

What do you know by ASBA?

What do you know by Sensex?

What do you know by a convertible debenture?

What is an initial public offer?

What do you know by facebook whether it is good or bad for any individual and what is your
opinion?

What are the advantages and disadvantages of Whatsapp?

(The above questions are illustrative and not exhaustive and the candidate should know fairly well
about many banking as well as general aspects)

D. The fourth phase of the interview:

Like the initial phase or first phase, this fourth phase is also important wherein tricky questions will be
asked as mentioned below:

You are hailing from Coimbatore. In case you are posted to Chennai whether you will be willing to
work at Chennai. (Your answer: If I am posted at Coimbatore, I shall try my level best to bring more
business to the bank since I know the place and people well and I can take care of family members
who are dependent on me)

Suddenly on account of computer crash, you have to sit late whether you will be willing to sit late
and finish the job or leave early without informing your superiors? (Definitely I will never mind in
sitting late and I shall always cooperate with my superiors in finishing the day to day functions of the
branch. I am one among the team members and I have the responsibility to cooperate with other
members during critical situations)

What information are you willing to tell about yourself? (If I am selected, I shall work hard and I shall
discharge my duties to the entire satisfaction of my superiors. I shall always do the best from my
side)