BANKING INTERVIEW QUESTIONS AND ANSWERS

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 1.What is Term Repo? :-

Under term repo, RBI lends to banks through auction of funds. The minimum interest charged has to be above the repo rate and there is no limit for maximum interest rate because auction is made on the rate of interest.

 

2.What is white label ATM? :-

It refers to ATMs owned by corporate or private operators seeking to earn a commission by banks for transactions performed by their customers. For ex:- INDICASH by TATA group.

 

3.What is brown label ATM? :-

It refers to the ATMs where investment, installation and maintenance is by a private operator but the license and branding is by a commercial bank.

 

4.Tell us something about NABARD and its functions. :-

NABARD was established by an act of Parliament on 12 July 1976 as National Bank for Agricultural and Rural Development. It is the apex bank to provide rural credit and monitor the RRBs. The main functions of NABARD are:-

– Provide refinance to RRBs and other banks in rural areas for lending.

– Acts as a subsidiary for RRBs and co-operative banks.

It has two subsidiaries:-

– NABFINS:- NABARD financial

– NABCON: – NABARD consultancy.

 

5.What is banking ombudsman scheme? :-

The banking ombudsman scheme is a scheme to listen to customer’s grievances and complaints regarding certain services provided by the bank. It was introduced under the Section 35 A of banking regulation act, 1949 by RBI with effect from 1995 which was later amended and became the banking ombudsman scheme, 2006. Customer can appeal against the decision of ombudsman to deputy governor of RBI. He is the highest authority of appeal. All banks in India are covered under the scheme.

 

6.What is the difference between FII and FDI? :-

FDI or foreign direct investment is an investment that a parent company makes in a foreign country. FII or Foreign Institutional Investor is an investment made by an investor in the markets of a foreign nation. FII can enter the stock market easily and also withdraw from it easily. But FDI cannot enter and exit that easily as FDI only targets a specific sector.

 

7.What is the CAD? What is Fiscal deficit? :-

CAD or current account deficit is the difference between the imports and exports of a nation in one financial year whereas fiscal deficit is the difference between total revenue and expenditure of a nation.

 

8.What is inflation and deflation? :-

Inflation is the increase in the price of goods and services due to more demand and less supply. In inflation, there is more liquidity in market which has to be controlled to reduce the purchasing power of customers. Deflation is the decrease in prices of goods and services due to more supply and very less demand. In deflation, there is lack of liquidity in market which results in very weak purchasing power of people.

 

9.What is Capital Adequacy Ratio? What is DEMAT account? :-

CAR is the proportion of capital to the banks’ risk. DEMAT accounts are those in which shares, securities and insurance policies are kept in electronic form.

 

10.Name a few poverty eradication schemes of govt. of India. :-

Food Security bill, MNREGA, Sarva Shiksha Abhiyaan, Antoday Yojana, JNURRM, Swalamban Yojana, Nirmal Gram Yojana, Rajiv Awas Yojana, Indira Gandhi Pension plan etc. (Also read in detail about these schemes.)