1. Why do you want joining banking sector?
Ans- Banking is one of the fastest growing sectors in India with more stable and high growth and more over
providing wide range of career opportunities for graduates. So I want to take an opportunity to join in a bank.
.
2. What is the difference between Cheque and Demand Draft?
Ans- Cheque: Cheuqe is a negotiable instrument instructing a bank to pay a specific amount from a specific
account held in the maker/depositor name with that Bank.
Demand Draft: A demand draft is an instrument used for effecting transfer of money. It is a negotiable instrument.
.
3. What is a Non-Banking Financial Company (NBFC)?
Ans- A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged
in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by
Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture
activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has
principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non- banking company).
.
4. NBFCs are doing functions similar to banks. What is difference between banks & NBFCs ?
Ans- NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a
few differences as given below:
• NBFC cannot accept demand deposits;
• NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
• deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.
.
5 . What is Private Banking?
Ans- Banking services offered to high net-worth individuals. Private banking institution assists the high net-worth
individual in investing his/her money in exchange for commissions and fees. The term "private" refers to the
customer service being rendered on a more personal basis.
.
6. What is BSBDA?
Ans- Under the guidelines issued on August 10, 2012 by RBI: Any individual, including poor or those from weaker
section of the society, can open zero balance account in any bank. BSBDA guidelines are applicable to "all
scheduled commercial banks in India, including foreign banks having branches in India".
All the accounts opened earlier as 'no-frills' account should be renamed as BSBDA. Banks are required to
convert the existing 'no-frills' accounts’ into 'Basic Savings Bank Deposit Accounts'.
The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service available to all
customers, through branches .
The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for
furthering Financial Inclusion objectives.
.
7. What is BPS (Basis Points)?
Ans- BPS (Basis point) : - BPS is an acronym for basic points is used to indicate changes in rate of interest and
other financial instrument.
1 BASIC POINT IS EQUAL TO 0.01%
So when we say that repo rate has been increased by 25 bps, it means that the rate has been increased by 0.25%
.
8. What is KYC?
Ans- The Reserve Bank of India (RBI) has advised banks to follow ‘KYC guidelines’, wherein certain personal
information of the account-openingprospect or the customer is obtained. The objective of doing so is to
enable the Bank to have positive identification of its customers. This is also in the interest of customers to
safeguard their hard earned money.
The KYC guidelines of RBI mandate banks to collect three proofs from their customers. They are-
• Photograph
• Proof of identity
• Proof of address
.
9. What is Sub-prime crisis?
Ans- The current Subprime crisis is due to sub-prime lending. These are the loans given to the people having low
credit rating.
.
10. What is Base Rate?
Ans- It is the minimum rate of interest that a bank is allowed to charge from its customers. Unless mandated by
the government, RBI rule stipulates that no bank can offer loans at a rate lower than BR to any of its customers.
It is effective from, July 1, 2010. However, all existing loans, including home loans and car loans, will continue
to be at the current rate. Only the new loans taken on or after July 1 and old loans being renewed after this date will be linked to BR.
Ans- Banking is one of the fastest growing sectors in India with more stable and high growth and more over
providing wide range of career opportunities for graduates. So I want to take an opportunity to join in a bank.
.
2. What is the difference between Cheque and Demand Draft?
Ans- Cheque: Cheuqe is a negotiable instrument instructing a bank to pay a specific amount from a specific
account held in the maker/depositor name with that Bank.
Demand Draft: A demand draft is an instrument used for effecting transfer of money. It is a negotiable instrument.
.
3. What is a Non-Banking Financial Company (NBFC)?
Ans- A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged
in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by
Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture
activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has
principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non- banking company).
.
4. NBFCs are doing functions similar to banks. What is difference between banks & NBFCs ?
Ans- NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a
few differences as given below:
• NBFC cannot accept demand deposits;
• NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
• deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.
.
5 . What is Private Banking?
Ans- Banking services offered to high net-worth individuals. Private banking institution assists the high net-worth
individual in investing his/her money in exchange for commissions and fees. The term "private" refers to the
customer service being rendered on a more personal basis.
.
6. What is BSBDA?
Ans- Under the guidelines issued on August 10, 2012 by RBI: Any individual, including poor or those from weaker
section of the society, can open zero balance account in any bank. BSBDA guidelines are applicable to "all
scheduled commercial banks in India, including foreign banks having branches in India".
All the accounts opened earlier as 'no-frills' account should be renamed as BSBDA. Banks are required to
convert the existing 'no-frills' accounts’ into 'Basic Savings Bank Deposit Accounts'.
The 'Basic Savings Bank Deposit Account' should be considered as a normal banking service available to all
customers, through branches .
The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for
furthering Financial Inclusion objectives.
.
7. What is BPS (Basis Points)?
Ans- BPS (Basis point) : - BPS is an acronym for basic points is used to indicate changes in rate of interest and
other financial instrument.
1 BASIC POINT IS EQUAL TO 0.01%
So when we say that repo rate has been increased by 25 bps, it means that the rate has been increased by 0.25%
.
8. What is KYC?
Ans- The Reserve Bank of India (RBI) has advised banks to follow ‘KYC guidelines’, wherein certain personal
information of the account-openingprospect or the customer is obtained. The objective of doing so is to
enable the Bank to have positive identification of its customers. This is also in the interest of customers to
safeguard their hard earned money.
The KYC guidelines of RBI mandate banks to collect three proofs from their customers. They are-
• Photograph
• Proof of identity
• Proof of address
.
9. What is Sub-prime crisis?
Ans- The current Subprime crisis is due to sub-prime lending. These are the loans given to the people having low
credit rating.
.
10. What is Base Rate?
Ans- It is the minimum rate of interest that a bank is allowed to charge from its customers. Unless mandated by
the government, RBI rule stipulates that no bank can offer loans at a rate lower than BR to any of its customers.
It is effective from, July 1, 2010. However, all existing loans, including home loans and car loans, will continue
to be at the current rate. Only the new loans taken on or after July 1 and old loans being renewed after this date will be linked to BR.
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