Common Interview Questions and Answers on Banking
The banking sector is a money-related industry. Banking entails dealing with currency, financial transactions, account credit and debits, and so on. In simple terms, banking is the process of safeguarding the money that belongs to individuals and businesses.
Importance Of Banking:
- Banks offer a variety of savings plans, which encourage consumers to save money.
- Secures money transfers all around the world.
- Provides low-interest loans to the agriculture industry, which has an indirect impact on us.
- Generate employment for all the sectors of society
There are some basic questions are asked to freshers, which are shared in the article link “Interview Questions and Answers for Freshers“, Please go through the link.
Interview Questions and Answers on Banking:
The banking sector is regarded as one of the most respected and fastest growing industry. There is growth potential in this sector from the Trainee level to the general manager level, and the most important is this sector has job security.
KYC stands to know your customer. KYC is a process by which the banks get the information about their customers, i.e. the identity and address. The KYC details are taken from the customer while opening the bank accounts. KYC is received from the customer to identify the theft, to Prevent money from going to the terrorist, Money laundering and Financial fraud
- RBI has a right to issue the currency notes except the One rupee note.
- RBI manages the banking requirements of the government.
- RBI supports banks with money in their financial crisis. This is called “lender of last resort.”
- RBI manages the Foreign Currency
Working capital or net working capital is the difference between a company’s current assets such as cash, customers’ unpaid bills, inventories and the companies current liabilities like accounts payable.
Working Capital = Current Assets – Current Liabilities
Money laundering is the method of generating an impression that the money which has been collected from drug trafficking, criminal activity is from the legal source.
A bank is considered as a financial institution which deals with money matters. In a bank, customers can deposit and borrow money, and also it takes care of their financial stabilities.
Types of banks:-
- Retail Banking
- Business Banking
- Corporate Banking
- Private Banking
- Investment Banking
There are six types of account in banks:-
- Current Account – This account is for people with businesses, firms, and companies. Any number of transactions or the amount of transactions customers can do in a day.
- Savings Account – This account is used by the public for saving the money. Any person can open the account single or a joint account. The advantage of having a saving bank account is bank pays the interest on your savings.
- Recurring Deposit Account -This account is opened when a person wants to save a certain amount of money every month and earn a high rate of interest.
- Fixed Deposit Account – This account is opened when a person wants to put a specific amount for a particular time and get a high rate of interest.
- DMAT Account – This account is used to perform the transactions on the shares.
- NRI Account – This account is for the Indians who are settled out of India.
The documents required for KYC are:-
- Identity Proof -Passport, Driving Licence, PAN Card, Voter’s ID Card, Aadhaar Card
- Address proof -Passport, Driving Licence, PAN Card, Voter’s ID Card, Aadhaar Card
- Recent photograph
The different ways to operate my accounts are:-
- Internet banking
- Mobile banking
- Going to the Bank
- ATM ( Automated Teller Machine)
The different type of loans are:-
- Secured – A loan in which a borrower gives some asset as collateral like mortgage loan
- Unsecured – A loan in which a borrower does not provide the assets as collateral like personal loans
- Demand – These loans are the short term loans which do not have a fixed date of the repayment.
- Subsidized – In these loans, the interest is reduced by the hidden subsidy
- Concessional – These loans are given at the lowest market rates.
The banking software that is used by the banks are:-
- Finacle by Infosys.
- BaNCS by TCS.
- Flexcube by Oracle.
Some of the banking software applications are:-
- Internet banking system – This application allows the customers and the banks to do the transaction using the bank’s website.
- Stock market management system – This application manages the financial portfolio like securities and bonds.
- Loan management system – This application collects all the data and maintains the track about the customers who borrow the money.
- ATM banking (Automated Teller Machine) – ATM is an electronic banking machine which allows the customers to complete necessary transactions.
Debt finance is a cheaper source of finance because of the two essential points:-
- The company gets an income tax benefit on the interest component that is paid to the lender.
- If the company becomes bankrupt, debt holders have the first claim on their company assets (collateral) which increases their security
Cheque Demand Draft
It is issued by the customer It is published by the bank
Payment is made after depositing the cheque Demand draft is issued after giving the money to the bank
Signature is required in cheque Signature is not required in DD
It can bounce It cannot be dishonored