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DISCUSSION_FORUM_FOR_CLERK_INTERVIEW_
IBPS CLERK 4 INTERVIEW PREPARATION
DISCUSSION FORUM
https://www.facebook.com/groups/clerkinterview2015/
WEBSITE : www.aspiranthub.com
1 .What do u understand by Bank ?
2. What is the difference between RBI and Commercial banks ?
3. What is Repo Rate ?
4. What is Bank Rate ?
5. What is Reverse Repo Rate ?
6. What is CRR ?
7. What is SLR ?
8. What is MSF ?
9. How change in rate will effect Inflation ?
10. What are the types of banking ?
11. How increasing Repo rate or reverse repo rate will gonna effect
Inflation ?
12. What is NPA ?
13. What are the types of NPA ?
14. What do you understand by Liability ?
15. What do you understand by Assets ?
16. Why Public sector banks are having more NPAs then Private sector ?
17. Can you explain about Gross NPA and Net NPA ?
18. Who are Business Correspondents ?
19. Is their any difference between Borrower and Customer in banking
sector ?
20. Which one will you choose if u want to do banking - Internet or
Traditional Banking ?
21. Do you think PMJDY will be useful scheme for banking sector ?
22. What you can tell us about Financial Inclusion ?
23. Why Repo rate is always 1 % Less than MSF ?
24. Could you explain us about Collateral ?
25. Have u ever heard about SARFAESI ACT and DRT , if yes then what
are these ? can u explain these
terms ?
26. What is LAF ?
27. What is OMO ?
28. What is MSS ?
29. What do you understand by Overdraft ?
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30. Overdraft facility given to Current or Saving or Both type of accounts ?If
yes , any specific conditions ?
31. What do you understand by NEFT ?
32. What do you understand by RTGS ?
33. What do you understand by ECS ?
34. What do you understand by CTS ?
Which is more better process - Traditional process of clearing cheque or
Electronic process and why ?
35. Who is Drawer , Drawee and Payee ?
36. Cheque vs DD ? What are their uses ?
37. What are bank's Tier-1 Capital ?
38. What are bank's Tier-2 Capital ?
39. What do you understand by Risk Weighted Asset ?
40. What is CRAR or CAR ?
1 . What do u understand by Bank ?
Ans : Bank is a financial institution which accept deposit n lend to needy
persons bt nw a days banks provides
various typs of services under one roof lyk insurance mutual fund gold coin
remittance forex etc
OR - It's a financial institution which accepts money from the public in the
form of deposits and d same in lent
for purpose of investment
2. What is the difference between RBI and Commercial banks ?
Ans : Rbi is the appex banks , banker to banks/govt having sole right to
issue currency control credit and
money supply
commercial banks are fulfledge banks providing banking servicess to
individuals n corporate
3. What is Repo Rate ?
Ans : Repo rate is the rate at which the central bank of a country lends
money to commercial banks in the
event of any shortfall of funds.
4. What is Bank Rate ?
Ans : Interest rate at which a central bank will advance short term loans to
commercial banks. Changes in
bank rate are reflected in the prime lending rates offered by commercial
banks, which in turn affect investments
such as bank deposits, bond issues, mortgages. This term has largely been
replaced by newer terms baserate
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and prime rate.
5. What is Reverse Repo Rate ?
Ans : Reverse repo rate is the rate at which the central bank of a country
(RBI in case of India) borrows money
from commercial banks within the country.
6. What is CRR ?
Ans : Ratio of total ndtl of a bank kept wid Rbi in the form of cash is crr.
Right now it is 4%.
If increased liquidity decrease nd vice versa.
7. What is SLR ?
Ans : Statutory liquidity ratio (SLR) is the Indian government term for
reserve requirement that the commercial
banks in India require to maintain in the form of gold or government
approved securities before providing credit
to the customers.
OR - min % of bank's NTDL that they must invest in liquid securities ie govt
securities and other approved
securities
8. What is MSF ?
Ans : The rate at which rbi lends to commercial banks for overnight..it is
also collateral based lending and 1 %
more than repo rate
9. How change in rate will effect Inflation ?
Ans : less intrest rate leads to more borrowings leads to more money in
market leads to more inflation more
intrest rate leads to less borrowing leads to leass money in market same in
case of slr and crr more money in
market inflation will be more
OR - As interest rates changes like inc of CLR srr then the banks have to
keep their some amount vth RBI..as
interest rates are higher then the money vch thybhave to keep vth the RBI
higher so there is less amont with
the banks to lend so they increase the lending rates so inflation vl be
cntrled
OR - change in policy rate like crr,slr will require banks to park more money
with rbi or invest more in gsec ,will
lead to less money in circulation hance inflation controlled.
change in LAF will attract banks to park more money in safe hand of rbi,
banks also increase rate of ibtrest on
deposits means people will start saving money in banks ,money will b drain
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out from markey
10. What are the types of banking ?
Ans : In focus - Retail banking, Wholesale banking
Rest many names are too - like Parallel banking, social banking , merchant
banking, universal banking
11. How increasing Repo rate or reverse repo rate will gonna effect
Inflation ?
Ans : if repo rate is increased borrowing from rbi will be costlier,also rbi will
pay more ibterest on deposits of
banks ubder reverse repo.
so bank will increase rate of interest on deposits aswell as loan. people will
stop obtaining loans as its costlier
mean tym they will start saving with bank instead of consuption. inflation
controlled
OR - If repo rate will increase den loan will bcum costly for banks so dey
will lend less money or lend money to
public at high rates
dis will absorb d liquidity frm market and if d reverse repo will increase bank
would lyk to lend deir money to
RBI and lend less in d market
OR - Repo rate Increased - Bank will took less loan from RBI -- base rate
will increase --- Inflation Controlled
Reverse Repo rate Increased --- Bank will deposit more money to RBI ((
soaking liquidity ))
12. What is NPA ?
Ans : non performing asset- ie when loans turn into bad debts or borrowers
fail to repay principal + intrest
payment..here 90 days overdue criteria is followed..these r further divided
into sub-standard assets, doubtful &
loss assts
13. What are the types of NPA ?
Ans : sub standard- NPA <12 months , doubtfull – NPA >12 months , lost
assets- NPA greater than 2 years
14. What do you understand by Liability ?
Ans : Liabilities means we have to pay it back like in banking terminology
liabilities are deposits
15. What do you understand by Assets ?
Ans : Assets are those which we own or which increase our earning
capacity
16. Why Public sector banks are having more NPAs then Private sector ?
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Ans : Bcoz public sector banks do invest in ventures which r nt dat
profitable plus risky lyk priority sector
lending in which amt lend mostly turns out as bad debts
1. Due to less autonomy and more political intervention
2. Open to large Public sector lending for investment purpose
3. Providing subsidized loans in reference to Govt
which is less in the case of Private sector
Some more points :
1)Nexus between Bank officials n borrower.
2)No follow up after lending.
3)Under financing or over financing
4)Sometimes pressure from govt
5)No stricter recovery process.
17. Can you explain about Gross NPA and Net NPA ?
Ans : Gross npa: principal+ interest incurred
Net npa: only principal
18. Who are Business Correspondents ?
Ans : Any intermediary who are authirised by banks to carry out banking
activities on behalf of the bank.
an nbfc or any individual or any shoap, institution can b authorised for the
same
19. Is their any difference between Borrower and Customer in banking
sector ?
Ans : Customer is a wider term..it includes depositor as well as borrower
while borrower is that customer of
bank who is only coming for taking loan frm a bank
OR yes there is a little difference , a customer of bank can be any person
availing of bankibg services whether
he has an a/c with the bank or not. also includes borrower. borrower r also
custoner for banks who pop ups for
borowing purposes
OR All borrowers are customers but all customers are not borrowers.... As
simple az dis
20. Which one will you choose if u want to do banking - Internet or
Traditional Banking ?
Ans : I wud use both the services as some work that can only be done by
tradition banking and as internet
banking is concerned it is the time & cost effective service. So if both the
services are used acc to their sectors
preference then banking will be more easier.
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21. Do you think PMJDY will be useful scheme for banking sector ?
Ans : yes its. as it will fetch more cheaper CASA funds for bank on which
they can earn more money.
2ndly they got many new customers without expending much on ads they
will keep using banks services and
keep paying.
OR - Yes it attracts lot of funds by d depositors nd by govt.subsidies,dis
helps much to banks as d funds raised
nd more money is available for lending thus more profit
22. What you can tell us about Financial Inclusion ?
Ans : - FI - Providing banking services to all , but in priority to weaker
sections of society so that they can take
part in economic growth of country and can be directly benefitted , leading
to less corruption practices
23. Why Repo rate is always 1 % Less than MSF ?
Ans : Bcz - In MSF , while borrowing overnight Govt securities including
SLR is kept while in Repo it is
excluding SLR
24. Could you explain us about Collateral ?
Ans : It is a physical assets which is to be mortgaged for borrowing purpose
such as G-sec,land,machinery
25. Have u ever heard about SARFAESI ACT and DRT , if yes then what
are these ? can u explain these
terms ?
Ans : - DRT came in 1993 on the recommendation of narasimhan
committe,1991 . people could file cases
here. but with the time DRT mei truckload of cases aane lage. then in 1998
on the recommendation of
narsimhan committee II, SARFAESI Act was recommended which came
into effect in 2002. under this act,
lender can directly take the possession of the assets being mortgaged to
recover the loan without going to any
civil court. this act applies to loans above 10 lacs only.
26. What is LAF ?
Ans : - LAF- Liquidity Adjustment Facility . it is a quantitative tool of RBI's
monetary policy by which RBI
controls the liquidity/money flow in the market.
Under LAF, RBI has two tools :1 Repo Rate
2 reverse repo rate
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27. What is OMO ?
Ans : Open mkt operations performed by RBI to control supply of money in
economy by sale /purchase of
securities
28. What is MSS ?
Ans : This schemecame into existence following a MoU between the
Reserve Bank of India (RBI) and the
Government of India (GoI) with the primary aim of aiding the sterilization
operations of the RBI.
29. What do you understand by Overdraft ?
Ans : When an individual or company takes out more from an account and
the balance drops below the
allowed amount by the financial institution.
30. Overdraft facility given to Current or Saving or Both type of accounts ?
If yes , any specific conditions ?
Ans : Overdraft on both type of account..usually in current account but also
available in PMJDY. The number of
transactions are however limited in that account so can't be used for
business purpose whereas overdraft in
current account can be easily used for business transaction..
31. What do you understand by NEFT ?
Ans : NEFT - National Electronic Funds Transfer - It is used for transfering
funds electronically from one
account to another account Its payment based on DNS ( deferred net
settlement )) , in batch processing , took
more time than RTGS. Limit -- > Min - no limit , Max - no limit . For
Transferring in Nepal A/c - max limit - 50 k
32. What do you understand by RTGS ?
Ans : - RTGS - Real Time Gross settlement - It is used for transfering funds
electronically from one account to
another account, Real time- processing the instructions at the time they r
received. "gross settlement"settlement of funds/ transfer occurs individually . thus it is faster than NEFT
and mostly preferred by
businessman . Min Limit- 2lacs. no max limit
33. What do you understand by ECS ?
Ans : Ecs stands electronic clearing service. Used to do transactions that
are repetitive or periodic in nature.
Consists of 2 :- Ecs credit & ecs debit
Ecs credit example--salary dena logo k bank acc mai
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Ecs debit --elect. Aur telephone etc bill pay krna
34. What do you understand by CTS ? Which is more better process Traditional process of clearing cheque or
Electronic process and why ?
Ans : Cheque truncation system is the process of stopying the pyshical
movemnt of cheques instead of this
there is movement of cheques through electronically by scanng them vth
other details..to the receivers bank. It
is better than traditional process bcz it takes less time
35. Who is Drawer , Drawee and Payee ?
Ans : Drawer s d one who prepares d instrument n drawee who accepts it n
payee to whom d payment s to b
made
OR - Drawer is the person who issues the cheque and drawee is the bank
payee is the person on whom
cheque is issued
36. Cheque vs DD ? What are their uses ?
Ans : The following are the main differences between a cheque and a dd :
1. A cheque is issued by an individual,but a DD is issued by a bank.
2. A cheque is drawn by an a/c holder of a bank, whereas a draft is drawn
by 1 branch of a bank on another
branch of d same bank.
3. In a cheque, the drawer and the drawee are different persons. But in a
draft both the drawer and the drawee
are the same bank.
4. A Cheque can be dishonored for want of sufficient balance in the
account. Whereas a draft cannot be
dishonored. Hence there is certainty of the payment in the case of a
demand draft.
5. Payment of a cheque can be stopped by the drawer of the cheque,
whereas, the payment of a draft cannot
be stopped.
6. A cheque is defined in the Negotiable Instrument Act, 1881, whereas a
demand draft has not be precisely
defined in the NI Act.
7. A cheque can be made payable either to a bearer or order. But a
demand draft is always payable to order of
a certain person.
37. What are bank's Tier-1 Capital ?
Ans : - It refers to core capital...more important dan tier 2... Can absorb
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losses. Consists of paid up
capital,,statutory reserves,,disclosed reserves..etc
38. What are bank's Tier-2 Capital ?
Ans : C/a subordinate capital,, consists of undisclosed reserves,,long term
unsecured loans,,devaluation
reserves,,general provisions,subordinate term debt.
39. What do you understand by Risk Weighted Asset ?
Ans : Their is always a risk associated wid an underlying asset.. the degree
of that risk depends upon the
weightage given to it in investment portfolio if we talk about shares....
hence called Risk weighted asset ... like
for a building a tangible asset the risk are fire,earthquake etc .
40. What is CRAR or CAR ?
Ans : capital adequacy ratio- a basel parameter. it is the ratio of total
capital(tier1+tier2) to the risk associated
assets. i.e. more the risk weighted assets less will be the CAR and
vice-versa. more CAR good for the growth
of a bank..
41. How evaluation of Banks performed ?
42. What are Local area banks ?
43. What is Negotiable Instrument ?
44. What do you understand by Nationalisation of Banks ? In which year
nationalisation been done in India
45. What is faceless banking ?
46. What is Offshore banking ?
47. What is the difference between Mobile and Online banking ?
48. What are payment systems ?
49. Why do banks declare dividends ?
50. What do you understand by Merchant Banking ?
51. Why do PSB present dividend cheques to central government ?
52. Do you know Banks are supposed to observe prudential norms. What
are these norms ?
53. Now-a-days we are listening a word - "BASEL-III" . Could you just tell
what is this BASEL-III and is their
any other Basel version ? If yes, then what is the difference ?
54. What is stress testing in banks ?
55. Bank's additional means of earnings is fee based income. What does it
mean ?
56. Bank's main source of revenue is interest income. What is it ?
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57. What is the Board for Financial Supervision ?
58. Do you know about IBA . What role does it play ?
59. Five functions of RBI ?
60. What is the difference between EXIM Bank and Commercial banks ?
61. What is Kiosk Banking ?
62. What is Retail Banking ?
63. What are the significance of Bank Deposits ?
64. What is CASA ?
65. Deposit Accounts are classified under two categories. What are those
categories ?
66. What is KYC ?
67. What do you know about Current accounts ? Any specific difference
between Current and savings
accounts ?
68. What is Recurring deposits ? What is the difference between RD and
FD . Which is more beneficial for
bank and why ?
69. Term - Renewal of Deposits. Could you just give some light on it ?
70. What do you understand by Premature payments ?
71. Which documents are required to open an account ?
72. Who insure bank deposits ? Any norms by insuring body ?
73. What is meant by Accounts of HUF ?
74. Difference b/w retail and wholesale banking ?
75. Do Banks open Pension accounts ?
76. What are Dormant Accounts ?
77. Explain money laundering activities.
78. Why is interest not paid in current accounts ?
79. Can insolvent persons open accounts ?
80. What is TDS on bank interest ?
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41. How evaluation of Banks performed ?
Ans : - Through CAMELS Which stands for :
C - Capital adequacy
A - Asset quality
M - Management quality
E - Earnings
L - Liquidity
S - Sensitivity to Market Risk
42. What are Local area banks ?
Ans : Banking habit in India is miserable especially if we talk about
emerging markets. Villagers and people
from small towns feel safe to keep money buried in their backyard but
never trust the banks. With a view to
promote banking facilities in local area, providing institutional mechanisms
for promoting rural savings and to
mobilize credit facility for viable economic activities in the rural area Local
Area Banks are established there.
These LABs are categorized under private sector and included in the
second schedule of RBI Act, 1934.
Scope : These LABs are restricted to operate maximum in three districts.
They will be extending loan facility to agricultural requirements,
aggro-trade, aggro-industrial accomplishments,
non-husbandry accomplishments etc.
These banks will observe the priority sector lending target at 40% of Net
Bank Credit as other banks do.
Capital : The minimum paid up capital of LABs shall be Rs. 5 cr. However,
they are required to increase their
capital from Rs. 5 cr to Rs. 25 cr. In next 5-7 years.
43. What is Negotiable Instrument ?
Ans : An unconditional promise or order in written to pay a fixed amt of
money . Transferable via delivery or
endorsement.
44. What do you understand by Nationalisation of Banks ? In which year
nationalisation been done in India ?
Ans : Wen a country sovereign under take private organisation with interest
of common public welfare nd
believe by passing an ordinance by parliament which clearly mentioned
term nationalisation know as
nationalisation of tht industry or organisation.
In concern with Banking industry then govt of India done this in year of
1969 with 14 privately owned banks nd
again with 6 banks out of which 1 is merged.
45. What is faceless banking ?
Ans : - Most of latest banking is done through technology drivenmodels like
phone banking, internet banking,
mobilebanking etc where the customer does not interact face toface face
with any bank official. This form of
banking is known as faceless banking.
46. What is Offshore banking ?
Ans : Offshore banking - Branch of an Indian bank located at a special
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economic area or an area away from
the location from the customer in any other nation
OR Banking activity out of the country of the a/c holders mainly in those
countries where tax is low called tax
heaven.
47. What is the difference between Mobile and Online banking ?
Ans : Online banking is done over internet which facilitates almost all
sevices accept cash deposits like
payment & transaction statement, etc
whereas mobile banking is limited to transfering fund after registering the
number with the bank
48. What are payment systems ?
Ans : fund transfer mechanism to transfer mechanism from one bank to
another bank is called payment
system. for e.g. RTGS, NEFT,ECS,NPCI, N SWIFT etc.
OR A system which makes transaction to be effected b/w a payer and a
beneficiary. Ex- rtgs, neft etc
49. Why do banks declare dividends ?
Ans : Dividend is a part of profit earn by organisations in current year. After
profit netting dividend is distributed
to its share holder nd govt of india have majority stake in it so tht PSB give
dividend to govt of india
50. What do you understand by Merchant Banking ?
Ans : It is the combination of Consulting along with Banking services. In
simple words directing the customer
abt the right investment and doing banking busimess with that is called
Merchant banking
OR A combo of banking + consultancy
services(like,,financial,,legal,,managerial,,marketing ) is k/a merchant
banking.
51. Why do PSB present dividend cheques to central government ?
Ans : After profit netting dividend is distributed to its share holder nd govt of
india have majority stake in it so tht
PSB give dividend to govt of india
52. Do you know Banks are supposed to observe prudential norms. What
are these norms ?
Ans : Prudential Norms for Conversion of Unpaid Interest into 'Funded
Interest Term
53. Now-a-days we are listening a word - "BASEL-III"
Could you just tell what is this BASEL-III and is their any other Basel
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version ? If yes, then what is the
difference ?
Ans : Basel is city in switzerland n also the headquarter of BIS Bureau of
international settelment. main
objective of basel is safety ,solvence n soundness of the banking system
controlling of redit risk , market risk n
operational risk. in 2010 basel 3 guidelinesis released. These guidelines
are introduced in response to financial
crisis of 2008.India deadline to migrate to basel 3 is 31 march 2019.
54. What is stress testing in banks ?
Ans : It is a test performed in a bank to analyse wheather a bank has
sufficient capital to overcom d impact of
adverse economic condition. it can b done intrnally by bank as a part of ots
operation risk or may be done by
the supervisory authority as a part of their Regulatory function.
OR It is a tool to determine the capacity of commercial banks to safeguard
their working from different risks
and it is most important part to check the financial soundness of banks
55. Bank's additional means of earnings is fee based income. What does it
mean ?
Ans : - As banks generate income from Interest from different lending. Now
banks started earning from these
para banking services. Some example are :
A) Transaction charges on remittance of funds
B) Locker service
C) Letters of credit
D) Bankassurance
E) Bills business
56. Bank's main source of revenue is interest income. What is it ?
Ans : - Difference b/w lending rate and borrowing rate of banks is the real
income of banks.
OR Overall income = Income earned from interest on loans - Interest paid
on savings
57. What is the Board for Financial Supervision ?
Ans : BFS was set up in 1994 to oversee the indian financial system,
comprising not only commercial
bank,state cooperative bank but also all india financial institution and NBFC
. BFS has full time vice chairman
and 6 other member apart from RBI governar as its chairman.
58. Do you know about IBA . What role does it play ?
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Ans : IBA stands for Indian Banking Association
Present chairman Mr. TM bashin
It is an association of Bankers of India and comprises of 22 banks
it works in area of development coordination and strengthening Indian
banking system and assist members in
implementation of new system and adoption of standards among members
Recently it is playing a crucial role in Negotiating Wage Hike for Bankers
59. Five functions of RBI ?
Ans : 5 Functions of RBI a ) Banker to bank
b ) Banker to central government
c ) Currency issuer
d ) Forex regulator
e ) Monetary policy maker
60. What is the difference between EXIM Bank and Commercial banks ?
Ans : A) Exim banks was estd with a purpose to boost export by providing
all required assistance like info
regarding foreing markets risks associated with, financing project/trade.
while commercial banks main job is
providing bankin services to individual and corporate
B) EXIM BANK - It is an apex bank established mainly for boosting
international trade of country, by providing
financial assistance through lending loans either by self or with
collabaration with commercial banks
Commercial Banks - Banks which play a crucial role in Economic sector as
they provide banking services to
every individual of country
C) Banking is accepting the demand deposit with the purpose of lending.
This is called commercial bank work
bcoz it earn profit.
EXIM bank is a development financial bank which is established with the
purpose of developments of foreign
market finance, information nd training nd risk mitigation of exporters by
providing financing.
61. What is Kiosk Banking ?
Ans : It is self-service solutions, allowing customers to service themselves
with computer based touchscreen and
making different sort of transactions.
62. What is Retail Banking ?
Ans : Retail banking is when a bank executes transactions directly with
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consumers, rather than corporations
or other banks. Services offered include savings and transactional
accounts, mortgages, personal loans, debit
cards, and credit cards.
63. What are the significance of Bank Deposits ?
Ans : For bank: essential for passing loans and to generate income and
strengthen the economy stability in
particular environment
64. What is CASA ?
Ans : - current account and saving account.......it refers to demand deposits
of a bank
65. Deposit Accounts are classified under two categories. What are those
categories ?
Ans : 1 DEMAND DEPOSIT 2. TERM DEPOSIT
66. What is KYC?
Ans: Know Your Customer launched to stop anti money laundering
activities.
67. What do you know about Current accounts ? Any specific difference
between Current and savings
accounts ?
Ans : Current acnt basically businesses men ke lie hote h no. Of withdrawl
n deposit pr no restrictions n no
interest s provided on deposits. And saving s fr common people whose aim
s to save no. Of withdrawls s fixed
n interest s provided on deposits
68. What is Recurring deposits ? What is the difference between RD and
FD . Which is more beneficial for
bank and why ?
Ans : RD me ap har month ek fixed amount jama karte h ek fix time k
liye...(aaj kal amount varible RD b hoti h)
...FD is better thn RD coz FD me bank ko ke heavy amount initially mil jata
h...which is usefull for giving loan...
69. Renewal of Deposits. Could you just give some light on it ?
Ans : Its is applied on RAFA...in which u renew the matured amount for a
new time period
70. What do you understand by Premature payments ?
Ans: Payments which are made before the due date or maturity date.
71. Which documents are required to open an account ?
Ans : according to kyc guideline issued by rbi... 1-current photograph 2photo id 3- address proof
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OR Photo Id..add proff..photo...introducer well known to bank...peron has
to present at the time of opening a
acc
72. Who insure bank deposits ? Any norms by insuring body ?
Ans : Dicgc(subsidiary of rbi) insures bank deposits each depositor in a
bank is insured upto a maximum of
Rs.1,00,000
73. What is meant by Accounts of HUF ?
Ans : This is the account for hindu undivided fmly.this account is
maintained by karta(who is head of
family).karta has power to raise loan for family business .he is empowered
to do all kind of activities on behalf
of family but he cannot enter into patnership business.after karta demise
coparcener can take powers of karta
74. Difference b/w retail and wholesale banking ?
Ans : Retail banking : its main focus is on individual whereas wholesale
banking focus on corporates and big
customer ,
In Retail , size of loan is small and also recovery in retail banking is very
difficult whereas in wholesale banking
, size of loan are big and recovery can be possible with various DRTs
In Retail banking, large network is needed to cater customer base, while in
WB its not needed in that large.
75. Do Banks open Pension accounts ?
Ans : YES
76. What are Dormant Accounts ?
Ans : Those account which are not in use for 2 or more than 2 year are
considered as dormant accounts..
77. Explain money laundering activities.
Ans: A set of procedures, laws or regulations designed to stop the practice
of generating income through illegal
actions. In most cases money launderers hide their actions through a
series of steps that make it look like
money coming from illegal or unethical sources was earned legitimately.
78. Why is interest not paid in current accounts ?
Ans : Because charge lgta h unlimited transcation pr..to interest to vse hi
pura ho jata h..& ca is not for saving
purpose
79. Can insolvent persons open accounts ?
Ans : NO
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80. What is TDS on bank interest ?
Ans : Interest earned on bank term deposits is subjected to TDS if the
interest amount > stipulated limit
announced in the financial year
81. Why the need for stress on Financial Inclusion ?
82. What is no-frills account ?
83. What is atm ?
84. What are different types of ATMs and their difference ?
85. What do you know about SHGs ?
86. What is sub prime mortgage ?
87. What are floating interest rates for housing loans ?
88. How do loans becomes non performing ?
89. Explain the role played by ARC ?
90. What is meant by Credit Score ?
91. What is meant by Priority sector lending ?
92. What is a pre-approved loan ?
93. Consortium Financing ?
94. What is meant by Working Capital needs of a company ?
95. What is EMI and its full form ?
96. Explain CIBIL ?
97. What is a Reverse Mortgage Loan ?
98. What do you understand by this term " mortgage " ?
99. When does a loan becomes sticky ?
100. What is asset liability management ?
101. What is ways and means advaces??
102. what is loan syndication
103. What is effect of Npa increase for a bank ?
104. Is a guarantor liable on a loan ?
105. teaser rates ?
106. what is sme financing for banks ?
107. what is float money ?
108. what is syndicated lending ?
109. what is credit deposit ratio ?
110. how much of the banks deposits are available to be given as loans ?
111. If a person is not having any a/c how come will he b able to use the
credit card? how will he pay back
that credited amount?
112. what is basis point ?
113. what is clean balance sheet ?
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114. what is credit default swap ?
115. what is portfolio managmnt ?
116. what is cash flow n fund flow ?
117. what is currency chest and its use ?
118. what is gilt edged securities ?
119. What role has banking played in India's success story? If your branch
is not in a good position, what
should you do to bring it on the right path?
120. what is decreed account ?
81. Why the need for stress on Financial Inclusion ?
Ans : Financial inclusion policy has been brought to target each and every
customer and inculcate saving
habbit.so that more can be saved and more can be lend which will lead to
economic growth..
OR so that economy wud b better thru poor ppl also..aisa na ho paye ki
rich ppl hi growth kre aur poor aur
poor bne..ise rokne kkl loye financial inclusion
OR so that economy wud b better thru poor ppl also..aisa na ho paye ki
rich ppl hi growth kre aur poor aur
poor bne..ise rokne kkl loye financial inclusion
82. What is no-frills account ?
Ans : In Nov 2005,rbi asked banks to open no frill account.No -frill account
is low balance or zero based
account.
OR no frill a/c are those a/c where minimum balance is nt required. may be
or may be not opened with zero
balance.
services are limited means no unnecessary frills
OR Accounts with nill or very low balance requirements but devoid of
various facilities, so is the name "no
frills". Now rbi has directed to convert all no frills into bsbda accounts.
OR No frills a/cs means der r no condtns on these acnts..nd these renamed
as BSBDA a/cs..to promote d
financl inclsn rbi has intrducd dese acounts..
83. what is atm ?
Ans : atm is cash disbursing machine, from where cash can be obtained.
also some deposit taking atm accepts
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deposits too
OR automated teller machine through which we can withdraw cash, check
balance and mini statement at any
time any day
84. What are different types of ATMs and their difference ?
Ans : White label atm n brown label atm
brown label atm r of banks
n white label atm r of non banking entities
brown label atm have logo of bank bt white label dnt have logo of bnk
85. What do you know about SHGs ?
Ans : shg means self help group...it is the group of 10-20 poor people
come together for any micro business to
survive their lives by the help of ngo's and govt. including banks
86. What is sub prime mortgage ?
Ans : lending to those who are not economically of sound economic
background
87. What are floating interest rates for housing loans ?
Ans : floating interest rates vary according to market conditions..bank can
vary rate from time to time
88. How do loans becomes non performing ?
Ans: Wen the borrower does not repay the principal and interest for 90
days it vl become a NPA
OR when loan is not paid by borrower..after 90 days from due date..it is
non performing as it is not generating
any income for the bank..
89. Explain the role played by ARC ?
Ans : - Asset reconstruction companies that help resolving bank NPA's by
purchasing them from bank at low
rates.bank have the advantage that they receive some money from
fruitless NPA and balance sheet is cleared..
OR asset reconstruction companies buy NPA from banks and try to extract
maximum profit(money) out of
it.ARC do not pay banks from their pockets but via Security
receipts(SR)..SR are issued by ARC and only
Qualified foreign investors can buy these SRs...SRs are just like bonds(no
interest paid on it)..
90. What is meant by Credit Score ?
Ans : Credit score tells about how much a bank can give loan/credit to a
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borrower.
91. What is meant by Priority sector lending ?
Ans : priority sector lending is lending to those sectors which are very
essential for the development of
country bt without govt help (subsidies) cant prosper. as per rbi norms all
SCBs hv to lend atleast 40% of their
total credits to these sectors including foreign banks if sufficient number of
branches r operationa in india
OR its simply lending to the weaker sections viz agri ..nd other allied
activities,,export credit,,home loan ,,edu
loan,,every comm bank hv to lend 40% of total cash after excluding crr
and slr,and,rrbs ko 60%
92. What is a pre-approved loan ?
Ans : A pre approved personal/home/car loan is usually offered by banks
to people who have a clean track
record of loan repayment history
93. Consortium Financing ?
Ans : Financing by multiple banks with one bank acting as a lead bank. All
documentation is done by the lead
bank. After the loan is sanctioned form creating the charge on assets is to
be filed with mca in Form CHG 1
with specifically mentioning it as Consortium Lending
OR consortium simply means partnership. when a loan amount is
large,generally many banks come togather
to lend mutually. this activity is called consortium. one of them generally
having the largest share will work as
lead bank
94. What is meant by Working Capital needs of a company ?
Ans : Short term capital required to conduct d day to day operations of a
company lyk purchase of stock ,raw
materials etc.
95. What is EMI and its full form ?
Ans : EMI stands for equated monthly installments..it is a fixed payment
amount made by a borrower to a
lender on a specified date of every month.
OR EMI - Equated monthly instalment........it's a monthly instalment which
is fixed for repayment of any term
loan in which part of interest is also included in the instalment...
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96. Explain CIBIL ?
Ans : Credit Information Bureau (India) Limited is India’s first Credit
Information Company (CIC) founded in
August2000. CIBIL collects and maintains records of an individual’s
payments pertaining to loans and credit
cards. These records are submitted to CIBIL by member banks and credit
institutions, on a monthly basis. This
information is then used to create Credit information reports (CIR) and
credit scores which are provided to
credit institutions in order to help evaluate and approve loan applications.
CIBIL was created to play a critical
role in India’s financial system, helping loan providers manage their
business and helping consumers secure
credit quicker and on better terms.
97. What is a Reverse Mortgage Loan ?
Ans : a scheme launched by nhb for senior citizens where they can get
loan against their immovable
properties. the major benefit is that they dnt gotta pay the loans back and
can use pledged assets either. once
they die, the bank will take possession of the assets ,sell it and add the
proceeds in the loa a/c.
98. What do you understand by this term " mortgage " ?
Ans : A mortgage is an agreement that allows a lender to seize property
when a borrower fails to pay....!!
OR A mortgage is a way to use one's real property, like land, a house, or a
building, as a guarantee for a loan
to get money
99. When does a loan becomes sticky ?
Ans : when the borrower fails to pay interest on his loans for 90 days den
the loans becomes sticky
100. What is asset liability management ?
Ans : Asset Liability management has been introduced in banks w.e.f 1
April 1999. It basically deals with
ensuring there is no mismatch in assets and liabilities from risk point of
view. Banks are required to constitute
ALCO -Asset Liability Management Committee headed by CMD or ED for
the purpose.
OR - management of asset and liabilities for a good return or maximum
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overall interest
101. What is ways and means advaces??
Ans : Its a credit facility given by RBI to central and state govts to meet
their shortfall of funds
OR Government incur expenses daily but receipts are irregular and so at
times government faces temporary
mismatches in payment and receipts...so to bridge this mismatch RBI gives
temporary overdraft to
government called ways and means advances(WMA)...time period is of 10
days for both central and state
government and rate of interest = repo rate.
Now limit is 35000 crore
102. What is loan sydication ?
Ans : Loan syndication is a lending process in which a group of lenders
provide funds to a single borrower.
103. What is effect of Npa increase for a bank ?
Ans : 1)the profitablty of d bank is effectd
2)to the extnt of npa it is creatd as bad debt,hence it does nt genrt ny
income or intrst to d bank
3)recyclng of funds is effected(i mean circulatn of mny is effctd).
4)finally the image of d bank also effctd..
104. Is a guarantor liable on a loan ?
Ans : Yes
105. teaser rates ?
Ans : Teaser rates means giving home loans primarily on lower rates
..which gets increase acc to market
conditions from passage of
time.
106. what is sme financing for banks ?
Ans : providing credits to small n micro enterprises. comes under PSL
OR Financing to small nd medium enterprises..to promote
their(sme)growth ...which is imp..
107. what is float money ?
Ans : The amont dt remains wid banks when a cheque comes for collection
until the amount finally credited to
the beneficiary account.
108. what is syndicated lending ?
Ans : also known as consortium financing, when banks comes together and
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extend the loan facilities by
sharing the loan amt b/w themselves. this helps banks for reducing the risk
109. what is credit deposit ratio ?
Ans : Its loan to deposit ratio
110. how much of the banks deposits are available to be given as loans ?
Ans : Excluding crr and srr ratio.. On total ndtl.
111. If a person is not having any a/c how come will he be able to use the
credit card? how will he pay back
that credited amount?
Ans : if one obtains a credit card means a revolving a/c is created in his
name. there is a mininum amount
has to b paid every month on fixed date to continue revolving a/c . hwevr
the card holder may pay even the
whole amount. and the intrest is charged on remaining amount
112. what is basis point ?
Ans :100 basis points = 1% , Its the hundredth part of 1 per cent
113. what is clean balance sheet ?
Ans : A statement which shows that company either has no debt or very
small debt
114. what is credit default swap ?
Ans : It is a tool to transfer and manage credit risk through redistribution
of risk
115. what is portfolio managmnt ?
Ans : Portfolio Management (PM) guides theinvestor in a method of
selecting the bestavailable securities that
will provide theexpected rate of return for any givendegree of risk and also
to mitigate (reduce)the risks. It is
a strategic decision which isaddressed by the top-level managers.
OR portfolio management means to carry best(debt free),risk
free,multibaggar shares(stocks) of diff. Sectors
under single investor .. (explaind in terms of capital market )
116. what is cash flow n fund flow ?
Ans : Cash flow is based on small concept of funds but funds flow is based
on the changes in working capital
cash folw is based on cash basis and fund folw is based on accural basis
cash folw is useful for short term but fund flow is for long term basis
OR fund flow shows the changes in working capital,whereas cash flow
deals with cash coming frm diff
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activities of a buss entrpriese
117. what is currency chest and its use ?
Ans : currency chests r authirised branches of banks work as warehouse
where currencies are stocked and
distributed in that area as per requirement
OR To facilitate the distribution of bank notes nd coins rbi has authorised
some branches of commercial bank
to establiahed currency chest.it's storehouse where bank notes nd coins
stocked on d behalf of rbi
118. what is gilt edged securities ?
Ans : sometimes government need finance when tax collection is low and
need temporary funds..so to get
these funds gov issue securities called gilt-edged securities sold by RBI on
behalf of government..it is a best
option to invest in these securities as there is low risk chances and Gov has
high credit ratings(AA) and hence
can repay the principal and interest on time for sure.
119. What role has banking played in India's success story? If your branch
is not in a good position, what
should you do to bring it on the right path?
Ans : banking plays a crucial role in development of every country. from
individual to corporate via
government.
its provides credit and other financial services to business in order to make
economy prosper. it provide
various deposit schemes to common people through which they start
saving small amount and hence purchase
power parity is increased. it helps govt run its various schemes/
programs/initiative smoothly for the purposes
of development & nation building
120. what is decreed account ?
Ans : A decreed account is one where a settlement has been reached
between a bank and a defaulter, and
with the mutual agreement, a consent decree has been obtained either by
a civil court or the debt recovery
tribunal (DRT).
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121. if a bank doesnt follow priority sector lending toh kya penalties hai ??
122.Role of gdp in indian economy ??
123. Problems of rural banking and solutions of it
124. names of negotiable inst.
125. banks me present me jo NPAs h unhe kaise reduce kiya ja sakta h
126. all comm. banks , rrbs, are included in Fin. inclusion then what is the
need of payment bank
127 GDR
128 SDR
129 Wats the percentage of loan distribution among priority sector
130 Total n. Of psb,private bank,foreign bnk n rrbs?
131 NDTL
132 what is NRE A/C ,NRO A/C ,FCNR A/C ?
133 kiosk banking example can be ATM ?
134 What is CAD ?
135. What is MUTUAL FUND, DEBENTURES, CHIT FUND ?
136. what is aadhar card and benefits in banking ?
137. what is cpi , wpi ? Explain and give proper difference.
138. Why CPI is a key indicator for inflation ?
139. Can we transfer in abroad via NEFT or RTGS ? If not, then by which
service we can do that ?
140. Difference between FCNR A/C and EEFC A/C ???
141. Why should bank consider debt equity structure of a company before
loaning?
142. How important is CASA portfolio for the bank?
143. What is Debit Card ?
144. What is Credit Card ?
145. What is Smart Card ?
146. Basic Difference BTW bal sheet of bank n company ?
147. What is Virtual Banking ?
148. What is Universal Banking ?
149. What do you understand by Underwriting ?
150. What is Settlement ?
151. Repurchase Agreement ?
152. Real Interest Rate ?
153. What is Rate of Return ?
154. What is Priority Sector Advances ?
155. What is Plastic Money ?
156. What is Personal Identification Number (PIN) ?
157. What is MIBOR ?
158. What is LIBOR ?
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159. What is Initial Public Offering (IPO) ?
160. What is Hedge ?
121. if a bank doesnt follow priority sector lending toh kya penalties hai ??
Ans : SECTION II PENALTIES FOR NON-ACHIEVEMENT OF PRIORITY
SECTOR LENDING TARGET /
SUBTARGETS
1. Domestic scheduled commercial banks – Contribution by banks to Rural
Infrastructure
Development Fund (RIDF): 9
1.1 Domestic scheduled commercial banks having shortfall in lending to
priority sector target (40
per cent of ANBC or credit equivalent amount of Off-Balance Sheet
Exposure, whichever is
higher) and / or agriculture target (18 per cent of ANBC or credit
equivalent amount of OffBalance
Sheet Exposure, whichever is higher) shall be allocated amounts for
contribution to
the Rural Infrastructure Development Fund (RIDF) established with
NABARD. The concerned
banks will be called upon by NABARD, on receiving demands from various
State
Governments, to contribute to RIDF.
1.2 The corpus of a particular tranche of RIDF is decided by Government of
India every year. Fifty
per cent of the corpus shall be allocated among the domestic commercial
banks having
shortfall in lending to priority sector target of 40 per cent of ANBC or credit
equivalent amount
of Off-Balance Sheet Exposure, whichever is higher, on a pro-rata basis,
and fifty per cent of
the corpus shall be allocated among the banks having shortfall in lending to
agriculture target
of 18 per cent of ANBC or credit equivalent amount of Off-Balance Sheet
Exposure,
whichever is higher, on a pro-rata basis. The amount of contribution by
banks to a particular
tranche of RIDF will be decided in the beginning of the financial year.
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1.3 The interest rates on banks’ contribution to
122.Role of gdp in indian economy ?
Ans : A country's gdp is the indicator of a country's growth...it tells abt
their economic condition..whether it is
developed or developing...
123. Problems of rural banking and solutions of it ?
Ans : Lack of technology...low participation of villagers... (Mostly the
villagers go to moneylenders who offers
higher interests...)..agri loan waivers..
124. names of negotiable instruments ?
Ans : Cheque,promissory notes,bank draft,commercial paper,certificate of
deposit,treasury bills,railway receipts
125. banks me present me jo NPAs h unhe kaise reduce kiya ja sakta hai ?
Ans : precaution is better than cure , can be reduced by lending only after
getting colletral, proper documt
verification whether the assets being pledged is in the name of customer or
nt or if any liabilities towards that
assets.
2. proper inquiry whether the loan amount is using for the same purposes
for which it has been extainded. to
eliminate willful defaulters.
3. stickt enforcement of sarfaisi act or reducing political interferences
4. while making clean loans credit report most be accesed from cibil
126. all comm. banks , rrbs, are included in Fin. inclusion then what is the
need of payment bank ?
Ans : Bcoz dat banks hv to complete basel norms...but they are lacking
funds due to increasing npa....
127 What is GDR ?
Ans : GDRs r financial instruments issued with an objective to raise money
from European investors(ie issued
in european market)
128 What is SDR ?
Ans : SDR is an international reserve asset, created by the IMF in 1969 to
supplement its member countries’
official reserves. Its value is based on a basket of four key international
currencies, and SDRs can be
exchanged for freely usable currencies
OR sdr is international reserve fund kept under the custody of imf. it shows
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the drawing right of its member
states. the value of sdr is determined as the avg value of four major
currencies usd, pounds, yen & euro
129 Whats the percentage of loan distribution among priority sector ?
Ans : banks with more than 20 branches = 40% ( in which agriculture =
18% advance to weaker secn =
10%)
less than 20 branches = 32%
130 Total no. of psb,private bank,foreign bnk n rrbs?
Ans : PSB: 27(21+SBI+SB ASSOCIATES) Private:23 Rrbs:56 Foreign:41
Nationalised
19
131 What is NDTL?
Ans : NDTL stands for net demand & time liabilities.. these r d liablts of d
bank..
Demand liabilities: savings & current deposits..
Time liabilts: fixed & recurring deposits..!
OR - Total deposits of the customer with the bank. Ndtl has 2 types of
deposits --- demand deposits( which
are payable on demand) time deposits ( which are payable on the date of
maturity). CASA is demand and
RAFA is time deposits. These are the liabilities of the bank
132 what is NRE A/C ,NRO A/C ,FCNR A/C ?
Ans : NRO- when a resident becomes Non resident, his domestic rupee a/c
gets converted into Non residential
ordinary a/c...can be opened as both CASA & RAFA..Pricipal- non
repartible, intrest- patriable
133 kiosk banking example can be ATM ?
Ans : kiosk means a small store, in case of banking kiosk means an
unmaned store where customers can
widraw money, deposit money,get their cheque/dd printed, cheque depisit
etc. atm can b an example as many
atms nwadays accepting cash too
134 What is CAD ?
Ans : Current account deficit . its is the difference between the total
expenditure and total income of the
country.
135. What is MUTUAL FUND, DEBENTURES, CHIT FUND ?
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Ans : mutual fund is an investment programme that is made up of a pool
of funds collected from many
investors for the purpose of investing in securities such as stocks, bonds,
money market instruments and
similar assets (ie diversified portfolio) and is managed by experts.
A type of debt instrument that is not secured by physical assets or
collateral. Debentures are backed only by
the general creditworthiness and reputation of the issuer..In simple
language we can say it's a loan taken from
public by corporations and carries fixed return(ie interest) unlike shares
Chit Fund is a saving scheme practiced in India. It originated 1000s of
years ago. It was started as informal
association of traders and households with in communities. It enables poor
people to convert small savings
into lump sums. Chit fund transaction is an agreement with a specified
number of persons that every one of
them shall subscribe a certain sum of money over regular fixed intervals,
136. what is aadhar card and benefits in banking ?
Ans : Aadhaar is a 12-digit unique identification number issued by the
Indian government to every individual
resident of India. The Aadhaar project was initiated as an attempt towards
having a single, unique
identification document or number that would capture all the details,
including demographic and biometric
information, of every resident Indian individual. It will also serve as the
basis for Know Your Customer (KYC)
norms used by banks
OR the 12-digit adhar card carries biomatric info of the individual it means
geting forged info or getting
multiple such cards is almost impossible this quality makes it very atractive
in bankibg and can be easily
accepted under kyc norms as both id proof aswell as adress proof. if the
mentioned adress is changed just a
self attestation form having current adress will do after puting signture or
thumb impression of the customer.
also bnks urging evryone to link his existing a/c to adhar so that DBT can
be availed
137. what is cpi , wpi ? Explain and give proper difference.
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Ans : yes indexes for measuring inflation. cpi measures price rise of goods
n services at consumer level where
even service charge levied on consumer is included.
while wpi measers the same at wholesale level where many taxes or
charges levied on consumers r excluded.
untill 2014 rbi used wpi bt nw it moved towards cpi
OR Wpi s wholesale price index used to measure price chnges in d guds
bought by wholesellers from
producers while cpi s consumer price index which measures the price
chnge in d guds bought by ultimate
consumers ....both measure inflation ie price rise
138. Why CPI is a key indicator for inflation ?
Ans : cause it gives actual statistics of wat actually consumer bears while
making purchases. as in wpi service
tax , sale tax etc r excluded which makes a huge difrence b/w consumer
price n price at wholesale price level
139. Can we transfer in abroad via NEFT or RTGS ? If not, then by which
service we can do that ?
Ans : no..we can use wire transfer for such purpose. Wire transfers allow
people in different geographic
locations to easily transfer money to locales and financial institutions
around the globe. For providing the
service, banks will collect a fee, sometimes based upon the size of the
transfer being made ..
140. Difference between FCNR A/C and EEFC A/C ???
Ans : Exchange Earners' Foreign Currency Account (EEFC) is an account
maintained in foreign currency with
an Authorised Dealer i.e. a bank dealing in foreign exchange. It is a facility
provided to the foreign exchange
earners, including exporters, to credit 100 per cent of their foreign
exchange earnings to the account, so that
the account holders do not have to convert foreign exchange into Rupees
and vice versa, thereby minimizing
the transaction costs.
fcnr opened by NRI
EEFC-- All categories of foreign exchange earners, such as individuals,
companies, etc. who are resident in
India, may open EEFC accounts
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141. Why should bank consider debt equity structure of a company before
loaning?
Ans : To check its soundness for repayments plus companies act puts
limitations on the borrowing of the
company linked to equity and reserves so the bank must ensure that the
aggregate borrowings must be within
the limits.
142. How important is CASA portfolio for the bank?
Ans : CASA means current account and saving account. The deposits in
these accounts influence the most on
banks profitability. The bank gives a very modest rate of interest on saving
accounts whereas no interest is
paid by the bank on current accounts. Therefore banks are tried hard to
deposit more and more money in
these accounts by the public so that banks earn spread ie profits by
making loans and advances.
OR CASA r low cost deposits , thus in order to be competitive, banks
should try to garner as much CASA as
possible coz by doing so they can control the cost of raising deposits and
hence can lend at more competitive
rates.
143. What is Debit Card ?
Ans : Debit card is a prepaid card.it is a payment gateway through which
cutomer can do all transactions if
he/she has balance in thier account.
144. What is Credit Card ?
Ans : CC is issued by bank/non bank entity through which we can withdraw
money frm atm,used at POS for
shopping etc ..... also there is overdraft facility 4 customers.
145. What is Smart Card ?
Ans : It is an intigrated circuit card(iic)...also known as electric bag...used
for transaction purpose....used for
shoping......money can load through atm and mobile....
146. Basic Difference BTW bal sheet of bank n company ?
Ans : in banks' b/s assets r loans granted & liabilties r deposits of public
and businesses while in case of
Co...under assets heads- all fixed & current assets,under liabilties headloans from bank + all other currnt &
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fixed liabilties + its own capital
147. What is Virtual Banking ?
Ans : to deliver banking services primarily through Internet or other
electronic delivery channels is called
virtual banking
OR internet based banking,,thus eliminating the need to walk to bank
premises..eg ATM, Net banking
148. What is Universal Banking ?
Ans : all banking services say retail , wholesale, marchant, wealth
management etc under one roof . icici bank
is said to be the first bank to start universal banking in india
149. What do you understand by Underwriting ?
Ans : is an agreement by the underwriter to buy on a fixed date and at a
fixed rate, the unsubscribed portion
of shares or debentures or other issues. Underwriter gets commission for
this agreement.
150. What is Settlement ?
Ans : Conclusion of a securities transaction when a customer pays a
broker/dealer for securities purchased or
delivered, securities sold, and receive from the broker the proceeds of a
sale.
151. Repurchase Agreement ?
Ans : An arrangement in which a security is sold and later bought back at
an agreed price and time.
152. Real Interest Rate ?
Ans : nominal interest rate – inflation rate = Real Interest Rate.....An
interest rate that has been adjusted to
remove the effects of inflation to reflect the real cost of funds to the
borrower, and the real yield to the lender.
The real interest rate of an investment is calculated as the amount by
which the nominal interest rate is higher
than the inflation rate.
153. What is Rate of Return ?
Ans : (net profit / investment made) * 100
154. What is Priority Sector Advances ?
Ans : Lending to certain specified sectors identified as priority sectors by
RBI viz MSME, agriculture, SHGs,
Rural credit, retail traders..banks hv to lend a certain fixed % of their
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lending to these. As per guidlines it's
40%
155. What is Plastic Money ?
Ans : These are basically plastic cards that are used for buying goods and
services on credit within specified
limits and according to term and conditions of the bank. Eg --- debit ,credit
and smart card
OR - collective term for all types of bank cards viz credit cards, debit cards,
smart cards, etc.
156. What is Personal Identification Number (PIN) ?
Ans : It is a 4 digit confidential numeric number with the help of it a
customer can withdraw money from the
ATM's.
157. What is MIBOR ?
Ans : MIBOR ie Mumbai Interbank Offer Rate is the interest rate at which
bank borrow funds from 1 another in
indian interbank market. The MIBOR is calculated everyday by NSE as a
weighted average of lending rates of
a group of banks.
158. What is LIBOR ?
Ans : The LIBOR is the world's most widely used benchmark for short-term
interest rates. It's important
because it is the rate at which the world's most preferred borrowers are
able to borrow money.
OR london interbank offered rate is the average interest rate estimated by
leading banks in London that they
would be paying if they borrow from other banks.
159. What is Initial Public Offering (IPO) ?
Ans : when any company issues its shares for the 1st time in stock market
to raise capital, its c/d
IPO..thereafter it becomes FPO(Further or follow on public offering)
160. What is Hedge ?
Ans : It is a strategy used to minimize the risk of a particular investment
and at the same time maximize the
returns on the investment
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161 bad debts ?
162 what is hawala & money laundering?
163 what is money ?
164. lok adalat ?
165. Line of Credit ?
166. Letter of Credit ?
167. GDP ?
168. GNP ?
169. what is parallel banking?
170. Can a 100 rs note be called as promissory note?and why?
171. On which accounts DICGC provides insurance cover??
172. Difference between bank and postoffice?
173. Pledge , Hypothecation , Mortgage , Lien ?
174. what is clearing house ?
175. what is participation certificate ??
176. what r d facilities enjoyed by a schedule bank from RBI/GOI?
177. can non schedule banks also get loans from rbi if there is any
emergency??
178. compulsion to maintain CRR is also with non schedule bank or not ??
179. wat is difference between Self help groups and microfinance
institutions ?? ( activities)
180. Banks maintain crr with RBI...y they have to maintain it...even no
interest is given to them on it,.but in
federal reserve interest is given to banks ?
181. Types of Money and What is velocity of money.
182 devaluation ??
183. depreciation???
184. Inflation vs Depression ?
185. Why RBI conduct open. Market operation?
186. Is a bank-overdraft a liability or an asset to the bank?
187. What is FCCB?
188. Are debentures issued by companies only, not government ?? unline
bond which r issued by both
companies & govt....
189. difference between advances and overdraft?
190. Explain Gift card ?
191. Steps taken by RBI to control inflation??
192. important services by different Indian Banks ?
193. TRADE DEFICIT ?
194. BALANCE OF TRADE ?
195. what is BCSBI (Banking Code and Standard Board of India)?
196. Balance of Payment ?
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197. Islamic banking ?
198. Bharat Bill Payment System..??
199. IPO vs FPO ?
200. difference between certificate of deposit and fixed deposit ?
161 bad debts ?
Ans : Npa known as bad debts or loans given by banks which r not
generating prof it for banks
OR debt that cannot be collectable
162 what is hawala & money laundering?
Ans : Conversion of an illegal money into legal money by process of
placement,,layering and integration is
called money laundering...hawala is a case of it.
163 what is money ?
Ans : its an instrument which can be used instead valueable commodities
like gold,silver and a medium for
payment of all goods and service
OR A thing dat is generally acceptable as means of payment in the
settlement of all transactions is
money..acts as a medium of exchange
OR Four broad functions to serve as money fr a commodity s it shud b a
medium of exchange ,measure of
value,standard n a store of value
164. lok adalat ?
Ans : lok adalat is formed under the provision of legal serice authority act
1987. both banker and borrower
come before the judge under one time settelement who after satisfying
himself about the genuiness of the
case puts his official stamp on the agreement . cases upto rs 20 lacs are
handeled here
165. Line of Credit ?
Ans : A credit dat can be taken from a bank upto a certain limit ..in
which..interest starts charging aftet the
actual usage of dat on dat much amount dat is used.
If taken 2 lac ,,uses 1 lac,,after 6 months den interest will charge after 6
months on 1 lac only. .
166. Letter of Credit ?
Ans : an instrument for assured payments,undertaking of the issuing bank
to make payment to beneficiary
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against documents stated in letter of credit...parties involved are:
applicant/buyer/importer,beneficiary/seller/exporter, issuing bank,advising
bank ,nominated/negotiating bank
and confirming bank.
167. GDP ?
Ans : GDP stands for gross domestic product..domestic --> within your
country...so GDP means money value
of everything u produce within your country..calculated by three
methods-expenditure method,income method
and production method
168. GNP ?
Ans : GNP=money value of everything produced in India+income from
abroad-outgoing money (to abroad).
OR Gross national product (GNP) is the market value of all the products
and services produced in one year by
labour and property supplied by the citizens of a country. UnlikeGross
Domestic Product (GDP), which defines
production based on the geographical location of production, GNP allocates
production based on location of
ownership.
169. what is parallel banking?
Ans : Parallel banking means carrying bnking activities along with other
activities ie nt primarily engaged in
bnking activities lyk nbfc dey do not perform complete range of bnking
activities
170. Can a 100 rs note be called as promissory note?and why?
Ans : According to artical 4 of Negotiable act 1881 promisory notes r define
excluding note nd currency
OR Nope... Currency and promissory note have same features bt currency
is not a PN
171. On which accounts DICGC provides insurance cover??
Ans : The DICGC insures all deposits such as savings, fixed, current,
recurring, etc. deposits except the
following types of deposits
(i) Deposits of foreign Governments;
(ii) Deposits of Central/State Governments;
(iii) Inter-bank deposits;
(iv) Deposits of the State Land Development Banks with the State
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co-operative bank;
(v) Any amount due on account of and deposit received outside India
(vi) Any amount, which has been specifically exempted by the corporation
with the previous approval of
Reserve Bank of India
172. Difference between bank and postoffice?
Ans : in banks we can open current account in post office we can't...in post
office the max limit to deposit is 1
lac and in banks no limit...in post office the max time for which we can
deposit is 5 while in banks it is 10..the
min amount in post office to deposit under time deposit is 200 while in
banks it is 1000 under fixed
deposit...banks issue Demand draft while post office can't.
173. Pledge , Hypothecation , Mortgage , Lien ?
Ans : (1) Pledge is used when the lender (pledgee) takes actual possession
of assets (i.e. certificates, goods ).
Such securities or goods are movable securities. In this case the pledgee
retains the possession of the goods
until the pledgor (i.e. borrower) repays the entire debt amount. In case
there is default by the borrower, the
pledgee has a right to sell the goods in his possession and adjust its
proceeds towards the amount due (i.e.
principal and interest amount). Some examples of pledge are Gold
/Jewellery Loans, Advance against
goods,/stock, Advances against National Saving Certif icates etc. (2)
Hypothecation is used for creating charge
against the security of movable assets, but here the possession of the
security remains with the borrower
itself. Thus, in case of default by the borrower, the lender (i.e. to whom
the goods / security has been
hypothecated) will have to first take possession of the security and then
sell the same. The best example of
this type of arrangement are Car Loans. In this case Car / Vehicle remains
with the borrower but the same is
hypothecated to the bank / financer. In case the borrower, defaults, banks
take possession of the vehicle after
giving notice and then sell the same and credit the proceeds to the loan
account. Other examples of these
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hypothecation are loans against stock and debtors. [Sometimes, borrowers
cheat the banker by partly selling
goods hypothecated to bank and not keeping the desired amount of stock
of goods. In such cases, if bank
feels that borrower is trying to cheat, then it can convert hypothecation to
pledge i.e. it takes over possession
of the goods and keeps the same under lock and key of the bank]. (3)
Mortgage : is used for creating charge
against immovable property which includes land, buildings or anything that
is attached to the earth or
permanently fastened to anything attached to the earth (However, it does
not include growing crops or grass
as they can be easily detached from the earth). The best example when
mortage is created is when someone
takes a Housing Loan / Home Loan. In this case house is mortgaged in
favour of the bank / financer but
remains in possession of the borrower, which he uses for himself or even
may give on rent .
OR - pledge: assets agains which loan is obtained and r kept under banks
custody
hypo: remains under borower possession
mortgage: immoval, remains under the borrwr possession
lien: judiciary/ laws r involved
174. what is clearing house ?
Ans : Association of banks in a particular locality to settle down payments
of cheques..etc by cancellation of
equal credit and debits of each bank singly..run by rbi nd sbi..tranfrs funds
quickly,,safely and at low cost.
OR A facility fr settlement of cheques btw different bnks done periodically
175. what is participation certif icate ??
Ans : They are the instruments dat want to Trade in capital market of a
country without being registered by
sebi.
OR if bank A has to extend credit deposit ratio then it has to either
increase deposit ratio or it has to reduce
credits. Bank A can reduce its credit by allowing BANK B to participate in its
advances .in this case bank A
issues participate certif icate to bank B.
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176. what r d facilities enjoyed by a schedule bank from RBI/GOI?
Ans : 1)bcms eligible 4 obtaining loans on bank.rate frm rbi
2)get d membership of clearing house
3)get d facility of rediscount of xchange bills frm rbi
OR - 1. Insurance of money deposited by there customers.2. If they where
in trouble rbi help them as a
parent bank.3. Enjoys various facilities lyk part of omo,obtaining long term
loan via bank rate etc ..3.can do
secondary functions lyk forex exchanges,mutual funds,bankasurance, etc
177. can non schedule banks also get loans from rbi if there is any
emergency??
Ans : YES
178. compulsion to maintain CRR is also with non schedule bank or not ??
Ans : Non scheduled bank also maintain CRR at par with schedule banks
As they are small banks nd nt hving infrastructure IT so they can't maintain
it with RBI nd for this they hv
permission to maintain it with commercial bank in current account nd
submit return for it fortnightly to RBI
179. wat is difference between Self help groups and microf inance
institutions ?? ( activities )
Ans : SHG is a grp of women villagers who collects money among following
members to start a micro
business....microf ince ins. Are those inst. Which finance micro
enterprise(total capital nt more than 25 lakh) to
estd/expand their business
180. Banks maintain crr with RBI...y they have to maintain it...even no
interest is given to them on it,.but in
federal reserve interest is given to banks ?
Ans : To secure depositors interest, RBI stipulated a certain percentage of
bank NDTL in form of cash only tht
is know as CRR. Earlier rbi has given interest on it but aft 2004 it
discontinued it .
Wen there is run conditions in banks or rumours for banks tht tym bank
needs immediate payment of
depositors money. Tht tym this CRR give cushion to bank.
181. Types of Money and What is velocity of money.
Ans : metallic money --- three type 1 standard money 2 token money 3
subsidiary money
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paper money --- 4 type .. 1 representative paper 2 convertible paper 3
inconvertiable paper 4 fiat money
acceptability money--- legal tendor money ,, 2 non legal tender money
182 devaluation ??
Ans : reducing the value of currncy of a nation intentionally by its govt in
order to promote international
trade...was done 3 times in india- 1949, 1966 & 1991
183. depreciation???
Ans : used in 2 context- depreciation of assets(in businesses) and
depreciation of currency..depreciation of
assets means decrese in its value over its estimated useful life...& depr of
currncy means fall in the value of
currncy in relation 2 other currencies
184. Inflation vs Depression ?
Ans : inflation- continuous increase in the price of a basket of goods and
services over a period of
time....Depression - i think it's great depression of 1930..that started in
1930 and lasted till late 1930s..in
which economies of many nations were totally shattered
OR if demand less and supply more deflation and vice-versa
185. Why RBI conduct open. Market operation?
Ans : The usual aim of open market operations is to manipulate the
short-term interest rate and the supply of
base money in an economy, and thus indirectly control the total money
supply, in effect expanding money or
contracting the money supply. This involves meeting the demand of base
money at the target interest rate by
buying and selling government securities, or other financial instruments.
Monetary targets, such as inflation,
interest rates, or exchange rates, are used to guide this implementation
186. Is a bank-overdraft a liability or an asset to the bank?
Ans : asset fr bnk n liability fr customer
187. What is FCCB?
Ans : Foreign currency convertible bonds...similar to other convertible
bonds..only diff is - issued by a
company (in its domestic country) in foreign currency...they r an imp tool
for MNCs
OR A convertable bond dat is issued in a currency other than d issuer's
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own. A company may issue an FCCB if
it intends to make a large investment in a country using dat foreign
currency.
188. Are debentures issued by companies only, not government ?? unline
bond which r issued by both
companies & govt....
Ans : Yes
189. difference between advances and overdraft?
Ans : Advance s loans granted to customers n overdraft s a facility to
withdraw more amt Dan u HV in ur accnt
190. Explain Gift card ?
Ans : any prepaid card issued by bank ,FIs or marchants, & retail stores
that can be used to make purchases
OR one of the main point on gift card u hv to give tax.. as like bonus card
191. Steps taken by RBI to control inf lation??
Ans : all monetary policy tools ( LAF( rep +rev repo)+ Reserve
ratios(CRR+SLR), OMO, bank rate)
192. important services by different Indian Banks ?
Ans : import export transactions payment services loans
193. TRADE DEFICIT ?
Ans : a negative balance of trade ie imports- exports
194. BALANCE OF TRADE ?
Ans : The difference between a country's imports and its exports. Balance
of trade is the largest component of
a country's balance of payments. Debit items include imports, foreign aid,
domestic spending abroad and
domestic investments abroad. Credit items include exports, foreign
spending in the domestic economy and
foreign investments in the domestic economy.
195. what is BCSBI (Banking Code and Standard Board of India)?
Ans : BCSBI is an independent and autonomous institution to monitor and
ensure that the Banking Codes and
Standards adopted by the banks are adhered to in true spirit while
delivering their services.
196. Balance of Payment ?
Ans : BOP is the record of all economic transaction between the resident of
country and the rest of the world
in a particular period.
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197. Islamic banking ?
Ans : Banking as per sharia law wherein investment is not done in the
business which are harram. Eg liquor
gambling pork businesses etc. Islamic banks do not charge interest on loan
rather they ask for profit sharing
OR it is dat banking systm vich involves principles & rules of SHariah ruling,
&& dis systm avoids reciept n
payments of interest in its transactn,,& cnductng opertns in such a way dat
it fullf ils d objectv of islamic
economy
198. Bharat Bill Payment System..??
Ans : It is an integrated bill payment system to pay light bill, phone bill,
water bill etc. The individuals will pay
their bills using modes such as credit cards, debit cards and cash in one
window, then the money will go to
one escrow account from his account. BBPS then pay each biller from that
account .
199. IPO vs FPO ?
Ans : ipo is used when an unlisted company in sebi makes offer for sale of
its securities to expand business
etc .FPO-this offer when already listed company makes a fresh issue of
securities to public or offer for sale to
public
200. difference between certif icate of deposit and fixed deposit ?
Ans : A certificate of deposit is limited in liquidity, with the initial deposit
meant to remain in the bank's
possession until the end of the term, often six months to a year. Only ten
percent of the investment remains
liquid and therefore it is available for withdrawal only through payment of a
large penalty. Such accounts are
designed to mature without interference. A fixed rate deposit often has
greater liquidity than a certif icate of
deposit, with a thirty percent reserve maintained to service any withdrawal
requirements. With three times the
reserve of a certif icate of deposit, fixed rate deposits are a strong choice
for investors who may be uncertain
about their future needs and allow them to access the liquidity of their
investment.
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201 what is debt ?
202 hot money
203 Term Money ?
204 Notice Money ?
205 How wil u define risk?
206 Difference betwren line of credit and cash credit ??
207 Difrnce betwn overnight repo and msf ?
208 Difference between omo and mss??
209 what is FMC??who controls it??
210 Adjustable-Rate Mortgages (ARMS) ?
211 Effect of Repo rate cut of 0.25 % in Economy ?
212 What is Authorization ?
213 What do you know about Bank Ombudsman ?
214 Difference between Small Bank and Payment Bank ?
215 What do you understand by Bouncing of a cheque ?
216 Certificate of Deposits (CDs) ?
217 If a person doesn't have proper proof,how will you open an account??
218 NABARD functions vs RRB Functions ?
219 Diff b/w FDI and FII ???
220 difference between banking and finance?
221 Participatory notes?
222 Definition of Term "REPO" only ?
223 Y is inflation a debtors enemy n creditors best frnd
224 Den diff BTW capital n money mkt ?
225 what is the difference between credit and investment?
226 Wt do u understand by share capital n its types ?
227 What is Subprime crisis?
228 Wt r d various sources fr raising capital ?
229 NOSTRO vs VOSTRO A/c ?
230 Base Rate vs Bank Rate ?
231 What is e-KYC? What is itz work?
232 Whats the difference between debentures and bonds..?
233 multi branch banking ??is it same as CBS ?
234 What is "Term Repo" ?
235 Under PMJDY, If the present address is different than that of printed
on Aadhaar Card, then a self
certification of current address is sufficient. What is exactly self
certification??
236 Is there any limit on amount in jan dhan account ?can i convert my
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normal saving account into jan dhan
account?
237 why bbps hs been proposed to be introduced if payments can be made
through online transaction
smoothly?????
238 Does PMJDY not violating the KYC guidelines??
239 What are inflation index bonds & to which inflation index r they linked
to- WPI or CPI ??
240 What is a wire transfer?
201 what is debt ?
Ans : A debt is a loan which is given by one person to another.
OR - that doesnt belong to a person/firm..ie they owe it to others...in
simple language it's a loan
202 hot money
Ans : It is flow of funds or capital from one country to another in order to
earn a short -term profit on interest
rate differences or anticipated exchange rate shifts. These capital flows are
called 'hot money' because they
can move very quickly in and out of markets.
OR money which is unstable in nature & moves into & out of the financial
mrkt of a company very quickly...it
is so c/d coz of its unstable nature..best eg is of fii
203 Term Money ?
Ans : 14 day above loans c/a term loan
204 Notice Money ?
Ans : in notice money , money is borrowed or lend for the period b/w 2
days and 14 day s
205 How wil u def ine risk?
Ans : deviation of actual return from expected return
206 Difference betwren line of credit and cash credit ??
Ans : Line of credit includes loans and advances wherein interest is
charged on lump sum amount. line of
credit is generally provided to corporates.
Cash credit sets a limit to withdraw the amount from tge the account.
Cash credit is provide against security.
What ever the amount is withdrawn interest is charged only on that
amount not on lumpsum.
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OR line of credit ek limit hai jisske uppar credit ka use nahi kiya jaata and
cash credit ek credit facility hai jo
kisi security k badle diya jaata hai
207 Difrnce betwn overnight repo and msf ?
Ans : he major diff is that under repo gsec cant be pledged lying under SLR
quota while in msf even slr quota
gsec can b pledged.
under repo a bank can fetch as much fund frm rbi as it has security to
pledge while under msf max upto 2%
of their NDTL
loans undr repo rate is available upto 90days where as under msf just for
ovrnight basis and...repo rate is
cheaper than msf
208 Difference between omo and mss??
Ans : dono mae govt security hi bechi jaati hai but mss mae paisa govt k
account mae rakha jaata hai jabki
omo mae rbi aapne pass rakhti hai
209 what is FMC??who controls it??
Ans : FMC is an independent body. its regulates comodity market. its
already a regulatory body.
anyway its controlled by ministry of finance, and PM too
210 Adjustable-Rate Mortgages (ARMS) ?
Ans : Also known as variable-rate mortgages. The initial interest rate is
usually below that of conventional
fixed-rate loans. The interest rate may change over the life of the loan as
market conditions change. There is
typically a maximum (or ceiling) and a minimum (or floor) defined in the
loan agreement. If interest rates rise,
so does the loan payment. If interest rates fall, the loan payment may as
well.
211 Effect of Repo rate cut of 0.25 % in Economy ?
Ans : interest rate kam honge jisse ki log jada loan lenge and kharch
karenge jisse business ka expension
hoga
OR - business will grow as borowing rates will be decresed by banks soon.
retail customers will also get
benefited as loans on home car etc will fall dwn. investment will be
incresed thas y sensex incresed 650points
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212 What is Authorization ?
Ans : aapne badle kisi ko decision lene k power ko tranfer karne ko
Authorization
OR authorising somone to carry out sm activities.
213 What do you know about Bank Ombudsman ?
Ans : The Banking Ombudsman Scheme enable an expeditious to bank
customers for resolution of complaints
relating to certain services rendered by banks. The Banking Ombudsman
Scheme is introduced under Section
35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.
there are 15 place where stable it .. .
214 Difference between Small Bank and Payment Bank ?
Ans : Small banks acepts all types of deposits like casa, fd rd..... Where as
payment bank acept only casa
deposite
Small banks give loans to for small area of operation..... Payment bank
cant give loans.. They invest in govt.
Security... Sells mutual funds, insurance products
215 What do you understand by Bouncing of a cheque ?
Ans : it means the chq is of amount which is not present in a/c at the time
when chq present for payment
OR jb a/c me sufficient money ni hota cheque ko pas krne k liye to cheque
bounce ho gati hai
OR bouncing of cheque is also called dishonor of cheque - according to
negotiable instrument 1881 sec 138 it
is crime ----- bouncing of cheque only - don't have sufficient balance
************ result- jail up to 2 year or
monetry fine upto double the amount written on cheque... or both
216 Certif icate of Deposits (CDs) ?
Ans : issued by all scheduled commercial bank(expect -rrbs, labs)min-7days , max-1year **** amount min -1
lakh max- its multiple *****when CDs issue financial institution - min 1
year max -3 year ** amount same
217 If a person doesn't have proper proof,how will you open an account??
Ans : he/she can open small acnt by submiting a photograph and sign in d
presence of bank officer for 1
year(validity is further extended if d customer wil submit all d reqd
documents)..... these acnts hv also sm
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operational restrictions
218 NABARD functions vs RRB Functions ?
Ans : abard is a development bank in the field of agrii & rural. it regulates
n refinance rrbs and all types
cooperative banks except urban or primary cooperatives which r directly
regltd by rbi.
whereas rrbs are Scheduled commercial banks cattering to small n
marginal farmers labourers n small incom
family. main objective is to provide farmers fequate n tymly credits
219 Diff b/w FDI and FII ???
Ans : Fii are the foreign firm investing money in share /eqity market of
india after taking permission from sebi
OR forigner jab 10% se jada invest karenge toe fdi warna fii
fdi long term investment plan k tahat aata hai but fii short term plan k
tehat
OR - FDI- A foreign invests acquire the controlling stake of the country..ie
acquires a part of ownership..it has
control over its management...FII- Foreign co only invests in shares of Co
and has no controlling stake...FDI
cant be taken back easily by such Cos..but FII can easily disinvest at
anytime they want
220 difference between banking and finance?
Ans : finance is a much wider term that includes resource allocation, their
management & investment ,while
banking is limited to accepting deposits & lending. .
OR Bank is the financial institution which takes deposite ,gives loan,cheque
clearing,tranfer money,invest or
safegaurd the money of customer.....and finance is the branch of
economics with resource allocation and
resource mangmt....finace is related to money and the makt. .
221 Participatory notes?
Ans : These are financial instruments used by investors or hedge funds
that are not registered with the
Securities and Exchange Board of India to invest in Indian securities.
Indian-based brokerages buy India-based
securities and then issue participatory notes to foreign investors.
222 Definition of Term "REPO" only ?
Ans : re purchase option : bank security rbi ko bechti hai and wachan deti
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ahi ki dubara kharidegi
223 Y is inf lation a debtors enemy n creditors best frnd
Ans : ja inf lation hoga toe price badh jaayega means same ammount ka
market value ghat chuka hoga toe jo
paisa le raha hai ussko wo ammount mehnge rate pae milega but jo de
raha hai usska fayada hai kyuki ussko
toe high intrest mil raha hai usspae
224 Den diff BTW capital n money mkt ?
Ans : capital mrkt- deal in long term instruments, money mrkt- its for short
term instruments
OR capital market is regulated ba SEBI whre as money market is regulated
by RBI. in capital market for long
term lending and borrowing is done whereas in money market short term
lending and borrowing is done.
225 what is the difference between credit and investment?
Ans : credit mae aap kisi ko loan dete hai but investment mae aap kisi field
mae invest karte hai jismae se
kitna return aayega usska koi garantee nahi rehta jo ki credit mae rehta hai
226 Wt do u understand by share capital n its types ?
Ans : share means part of smthing when it comes in business it means part
of ownership that r sold to smone
else making him partly owner n utilitising the fund raised in business. that
share is traded in secondary market
from one person to anothr.
OR capital that is raised by issuing shares is share capital...its 2 main
types- equity share cap & preferential
share cap
227 What is Subprime crisis?
Ans : when a person has not d capacity to repay the loan instead of dis
bank gives loan to him(in the lure of
getting high rate of intrsrt) is called sub prime lending and dis generates d
sub prime crisis lyk in past euro
zone,LIBOR crisis hapnd
OR When bank gives loan to low creditworthy customers is called sub
prime lending.. Thus crisis is due to sub
prime lending is called sub prime crisis..
228 Wt r d various sources fr raising capital ?
Ans : capital market, debt market...borowing from banks of FIs.
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for govt: disinvestment, manupulating rbi to propel banks to invest more in
slr. imposing taxes, making
sourcefull investment tax empted.
for common people: overtime
OR - shares , debentures & bonds r 3 main ways of raising capita l
229 NOSTRO vs VOSTRO A/c ?
Ans : nostro- our a/c with you , vostro- ur a/c with
us...***********.NOSTRO Account: A NOSTRO account is
maintained by an Indian bank in the foreign countries.
************VOSTRO Account: a vostro a/c is
maintained by a foreign bank in India with their corresponding bank.
OR nostro- our account with you.. vostro- your account with us.
230 Base Rate vs Bank Rate ?
Ans : base rate- min rate below which banks cant lend to borrowers...bank
rate- it's a monetary policy tool ,
rate at which RBI lends to bank for long term
231 What is e-KYC? What is itz work?
Ans : acc 2 rbi guidelines for e-kyc u should hv 12 digit aadhar no.... u hv
to submit just ur aadhar no. to
bank 4 ekyc service... after dis uidai wil transfer all ur ident ity(lyk
photograph,name ,gender,age etc) 2 ur
bank electonically.
232 Whats the difference between debentures and bonds..?
Ans : debenture : issued only by corporates , high return, high risk , bonds:
by goi or PSE , comparetivly less
return bt less or no risk
OR bonds are more secured than debentures...in bankruptcy case
bondholders are paid first and than
debenture holders. Interest in debentures r more than bobds
233 multi branch banking ??is it same as CBS ?
Ans : ll the transaction is done in any branch bank in multi branch Whereas
CBS is fully computerised banking
in which all the branchs of the bank is connected to core server so data is
directly assessed. i think both r
same .
OR multi branch banking means banking servies provided by various
branches of the particular bank
234 What is "Term Repo" ?
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Ans : A practice in which a bank or other financial
institution buys securities with the proviso that the seller repurchases the
same securities foran agreedupon
price on a certain day more than one day after the establishment of the
agreement. Investors and financ
ial institutions do thisin order to raise shortterm
capital. A term repo differs from other types of repo because the term is
more than one day.
235 Under PMJDY, If the present address is different than that of printed
on Aadhaar Card, then a self
certif ication of current address is sufficient. What is exactly self certif
ication??
Ans : self certif ication means... mentioning that my address has been
changed to xyz which is different from
that mentioned on adhar card. and certifying it by self by puting signature
or thumb impression
236 Is there any limit on amount in jan dhan account ?can i convert my
normal saving account into jan dhan
account?
Ans : yes there is a limit in JDA.yes u can convert normal saving account
into jan dhan account
237 why bbps hs been proposed to be introduced if payments can be made
through online transaction
smoothly?????
Ans : cause online facilities r nt easily available to everyone. before the
launching of pmjdy only 60% people
hv access to bank outta wich only 20% hv acces to internet banking.
bbps will work as a unif ied plateform for all from where utility bils or
recurring bills can be paid.
OR ll definitely save time n money as it wud avoid duplications plus
uniformity ll b ensure thru single bill n ll
curb frauds too certain extent
238 Does PMJDY not violating the KYC guidelines??
Ans : nope. kyc is also done here. anyway kyc norms has just been simplif
ied..e.g adhar will serve as both
adress aswell as id proof. even if address is diffrent self certif ication will do
etc.
239 What are inflation index bonds & to which inf lation index r they linked
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to- WPI or CPI ??
Ans : bonds that adjusted as per inf lation ie their rates r kept higher than
the inf lation rate. .
earlier they were linked to WPI..now CPI
240 What is a wire transfer?
Ans : means to tranfser money b/w 2 countries
241 Why PSBs give 4% Interest rate while Private Sector bank 7-8%????
242 .does bank charge penalty on premature withdrawal of FD?
243 what is fiscal policy ?
244 wht is ICRA nd ONICRA?
245 Difference between Mutual Funds and Hedge funds?
246 Why RBI is known as controller of credit?
247 Any reason for keeping Reverse Repo Rate 1% less than Repo
Rate??
248 In the total reserves of the RBI, how much % should be maintained in
the form of gold?
249 wt is disinvestment?
250 What are G-Secs ?
251 Diff bet Liquidity & Solvency?
252 Difference b/w tier 1 and tier 2 capital?
253 Difference between open cheque and bearer cheque?
254 Explain how ARC Work ?
255 What were the Basel-2 norms? explain in simple language
256 Who is a Qualified Foreign Investor?
257 what is hard and soft money?
258 Can a blind person open an account. If yes does he need witness. Can
cheques atm be issued to him ?
259 what is external commercial borrowing? Explain.
260 Net Asset Value ?
261 Pass Book ?
262 Post-Dated Cheque ? Why it is useful ?
263 explain the difference btw authorised capital ,issued capital and paid
up capital
264 Underlying Security ?
265 what is welfare banking? Who introduced it in india?
266 Difference between Micro finance and micro credit?
267 Are BSBDA and Small Accounts same???
268 what is refinance??
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269 Difference between Fixed and Variable Expenses?
270 Why a person should prefer a bank rather than a post-office for
keeping deposits?
271 special crossing cheques bearing , "SBI a/c payee " how it will honour
??
272 explain d layering stage(of money laundering) in easy language ?
273 Explain kishan credit card ?
274 why bancassurance is done by banks ?
275 what is prime lending rate ?
276 ATM : automated teller machine what is automated ?
277 CORE and CBS ?
278 Convertible Bond ?
279 ECS vs ACH ?
280 Arbitrage ?
241 Why PSBs give 4% Interest rate while Private Sector bank 7-8%????
Ans : private banks first to seize the opportunity and differentiate
themselves by offering higher rate of
interest. Public sector banks enjoys a large network of branches, huge
customer base and relatively high
CASA....
OR Private sector banks are still less attractive then PSB in India. The
requirements to open account in private
sector are also strict. So private sector bank offers more attractive intrest
rate(generally 6-7%) then PSB to
make its customer base stronger.
OR To attract more customer so it can get more deposit it leads to more
loans leads to more profit
242 .does bank charge penalty on premature withdrawal of FD?
Ans : Yes,1% or sometimes they dont charge.depends on the bank.
243 what is fiscal policy ?
Ans : fiscal policy means govt. adjust its spending level & tax rates to
moniter and inf luence a nations
economy
OR - fiscal policy means budgetory policy considering revenue n
expenditure to bring stability in economy
244 wht is ICRA nd ONICRA?
Ans : Credit rating agencies , hq—gurgaon
245 Difference between Mutual Funds and Hedge funds?
Ans : Mutual funds are low risk fund with low prof it while hedge funds are
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high risk funds to aim high profit .
OR - only diff z dat in hedge fund investment z much more higher,,dats y
its formed by high net worth
individual only...
OR mutual fund--any investor can invest , eq-100 rs min required in sbi
Hedge fund-only high net worth individual (ambani types k liye) 1 crore is
min investment
246 Why RBI is known as controller of credit?
Ans : coz it controls d creation of credit in d economy by regulating bnk
rate ,repo rate ,crr,etc. according to d
need of economy by increasing it in deflationary trend n reducing it inf
lationary trend
247 Any reason for keeping Reverse Repo Rate 1% less than Repo Rate??
Ans : no there is no reason it is the rule of rbi..(2010)
248 In the total reserves of the RBI, how much % should be maintained in
the form of gold?
Ans : 115 cr gold and 85cr foreign currency total 200 cr
249 wt is disinvestment?
Ans : selling of govt. stake in public enterprises to private sector with a
view to contain deficit
250 What are G-Secs ?
Ans : g-sec means easly convert into cash like bond ,treasury bill
251 Diff bet Liquidity & Solvency?
Ans : Solvency refers to an enterprise's capacity to meet its long-term
financial commitments but Liquidity
refers to an enterprise’s ability to pay short-term obligations.
252 Difference b/w tier 1 and tier 2 capital?
Ans : tier1 capital z considered the core capital of an organisation as it
easily can converted into cash like
equity capital....tier2 capital is less liquid taked more tym to convert into
cash like property as mortgage near
to bank
OR - Tier 1 core capital like equity and reserves and surpluses and tier2
supplimentary capital like undisclosef
reseve and general loss reserves
253 Difference between open cheque and bearer cheque?
Ans : bearer cheque z a type of open cheque where payee can incashed
the amount at counter..and in case of
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bearer cheque any person who presents it at counter get the cash
OR Open cheque can be endorsed to anyone but there is no need of
endorsement in bearer cheque anyone
can encash it
254 Explain how ARC Work ?
Ans : asset reconstruction company buy npa from bank and sell to other
and make profit. .
OR Bank sell their bad debt or npa to arc.. they charge their commsion on
this, futher arc try to fetch more
profit from these npa, they have to register under rbi, arcil is one of them,
they issue security receipts and
qualif ied institutions buyer wil buy thm like this process goin on..
255 What were the Basel-2 norms? explain in simple language
Ans : Basel 2 are reformed verson of basel 1. ek chij jo dono me common
ki minimum capital adquacy 8% 2nd
chij ki bank ek better risk management technique use kre jaise ki avi bda
loan dene se phle credit rating check
krti hai. aur 3rd ki bank jo v risk assesment ya risk exposure technique use
krti hai wo central bank ko jarur se
disclose kre.
OR basel 2 does nt have any explicit regulation on the debt that bank could
take and focused more on
individual f inancial institution and ignore systematic risk (entire banking
system may be collapse : like 2007
crisi). to ensure that bank does nt take excessive debt and dont rely much
on short term funds, Basel 3 was
preposed.
256 Who is a Qualif ied Foreign Investor?
Ans : 1)scheduled commercial bank 2)insurance company 3) FII
257 what is hard and soft money?
Ans : hard mny means physical money like currency n coins and soft
money means cash balances in our
accounts
OR - Hard money/currency---- it is a freely convertible currency that is not
expected to depreciate in value
relative to other currencies. It is of highly industrialised nations. Eg - $,£,€
and ¥ etc. Soft money/currency--- it
is a currency that is expected to drop in value relative to other currencies.
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It is of weaker economies.
258 Can a blind person open an account. If yes does he need witness. Can
cheques atm be issued to him ?
Ans : Yes..sa and term depo accounts can b opened..wid sig nd thumb
impression in the opening form which
should be witnessed by a respectable person .. No chequebook can be
issued.
OR You need to remember that a blind person is fully competent to enter
into a contract like any other
person. However, due to his physical disability, there can be a situation
where he contests subsequently that
the facts were misrepresented to him and-thereby try to avoid the
contract. Therefore, signature or thumb
impression of the blind person should be attested by an independent
witness to the effect that all terms and
conditions were properly explained to the blind person in his presence.
Moreover, cash deposit and withdrawal
by blind person should be handled by the officer of the bank. Cheque book
can be issued only if the blind
person can sign consistently.
259 what is external commercial borrowing? Explain.
Ans : Corporates getting f inance from foreign countries
OR - Borrowing money from foreign countries for business.
260 Net Asset Value ?
Ans : current market value of all the assests minus current liabilities divided
by no. of units
261 Pass Book ?
Ans : passbook is a statement which is recorded the customer deposit
value and withdraw value
OR Passbook is customer document which records all the ledger
transactions of his bank account
262 Post-Dated Cheque ? Why it is useful ?
Ans : Cheque having a date of future. Means that cheque will become valid
after that particular date of future.
OR it provides security to the issuer if work is nt accomplished in future he
cn cancel it
263 explain the difference btw authorised capital ,issued capital and paid
up capita l
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Ans : authorised which d co. s authorise to issue to d public by registrar of
companies ,issued d amt of capital
ie actually issued to d public fr subscription it may happen d co do not
issues d entire authorised capital fr
subscription n paid up capital s amt of share capital actually paid by d
shareholders cos it may b a case dat
shareholders do not pay d entire amt together
OR Authorised means max capital which can be issued . It is mentioned in
memorandum or article of
association
Issued : that part of authorised cap which is issued to share holders
Paidup : that part of issued capital which is paid by shareholders
264 Underlying Security ?
Ans : The security subject to being purchased or sold upon exercise of the
option contract.
265 what is welfare banking? Who introduced it in india?
Ans : welfare banking refers to provide financial support of needy ppl in
lower income group or economically
backgroung ppl.
266 Difference between Micro finance and micro credit?
Ans : Microf inance is a much broader concept than microcredit and refers
to loans, savings, insurance, money
transfers, and other financial products targeted at poor and low-income
people. Microcredit refers more
specif ically to making small loans available to poor people, especially those
traditionally excluded from financial
services, through programmes designed specif ically to meet their
particular needs and circumstances
OR Micro credit is part of microf inance js a provision to provide financial
services to poor ppl, micro credit is
extension of micro loans to unemployed , poor who r not considered S
bankable, they lack collatral,
employment and even they also lack in verif iable credit history, so they
are not eligible for even a traditional
loan
Originated in bangladesh and now in imdian banking also. .
267 Are BSBDA and Small Accounts same???
Ans : Bsbda are kyc compliant accounts, Small accounts are kyc relaxed
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accounts
268 what is refinance??
Ans : nabard rrb ko finance kare or rrb public ko to ise hi ref inance bolte h
OR refinancing means to rplace existing debt or loan with a new debt or
loan with different conditions of
payment often done to take reduce risk
269 Difference between Fixed and Variable Expenses?
Ans : fixed_expenses r fixd in nature lyk godown rent a/c ,, dey will remain
same irrespective of quantity
produced where as variable_expenses will accur only if uh produce lyk cost
of raw material nd Labour etc.
OR fixed expenses a those whose amt s fixed in nature irrespective of d
production or usage lyk rent of
building etc n variable r those which vary with production or usage lyk cost
of raw materials etc .
270 Why a person should prefer a bank rather than a post-office for
keeping deposits?
Ans :Due to the services related to net banking, mob banking n more
customer oriented approach
271 special crossing cheques bearing , "SBI a/c payee " how it will honour
??
Ans : In account of the beneficiary only if sbi presents it.
OR Crossing the cheque means the amount have to be credit in the
account of beneficial. It can not be
encashed on counter.. It is safest mode for cheque. .
OR Only sbi m ke a/c me hi transfer hoga amt
272 explain d layering stage(of money laundering) in easy language?
Ans : Money laundering involves three stages: placement, layering and
integration. Placement involves
physically placing illegally obtained money into the financial system or the
economy. Layering means
separating the illegally obtained money from its source through a series of
financial transactions that makes it
diff icult to trace the origin. Integration means converting the illicit funds
into a seemingly legitimate form.
Integration may include the purchase of businesses, automobiles, real
estate and other assets.
273 Explain kishan credit card ?
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Ans : Credit card issued to farmers to meet their agricultural needs for
seeds, instruments n fertilizers
OR It is a combined intiative of goi, rbi and nabard. Main aim to easily
provide credit to farmers without paper
work or less paper work.
274 why bancassurance is done by banks ?
Ans : To provide insurance and banking under one roof so that customer
dont have to go in search for
insurance co. Also to earn profit and customer satisfaction
275 what is prime lending rate ?
Ans : A rate on which bank lends to its credit worthy customer / prime
customer also called benchmark prime
lending rate . This is old concept now it is replaced by base rate
276 ATM : automated teller machine what is automated ?
Ans : Cash counting and vending primarily
Apart from that the functions of a bank teller whuch a machine performs
OR An automated maxhine means it wil perform bankers operations
automatically, like balance info, couting of
cash, deduction money from account.. etc..
277 CORE and CBS ?
Ans : Centralised online real time exchange
278 Convertible Bond ?
Ans : That bond which are converted in to equity shares
279 ECS vs ACH ?
Ans : Ecs electronic clearing service.. . frequent payments are cleared
Automated clearing house is a mediator to clear interbank payments e. g
rbi in case of nef t
OR Ecs is for repeated and periodicle transactions in which bank is
responsible for clearing payment on a
certain date..
Ach is mediator for interbank payments..
280 Arbitrage ?
Ans : The simultaneous purchase and sale of an asset in order to profit
from a difference in the price. It is a
trade that profits by exploiting price differences of identical or similar f
inancial instruments, on different
markets or in different forms
OR simultaneous buying n selling of securities used as a tool to avoid risk
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due to chnge in interest rates
OR buying security from 1 market at lesser price and selling it in another
mrkt at high price . Arbitrage
strategy is based on taking advantage of price differences in diff mrkts..
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