300+ TOP BANKING Interview Questions and Answers

BANKING Interview Questions for freshers experienced :-

1. What is bank? What are the types of banks?

A bank is a financial institution licensed as a receiver of cash deposits. There are two types of banks, commercial banks and investment banks. In most of the countries, banks are regulated by the national government or central bank.

2. What is investment banking?

Investment banking manages portfolios of financial assets, commodity and currency, fixed income, corporate finance, corporate advisory services for mergers and acquisitions, debt and equity writing etc.

3. What is commercial bank?

Commercial bank is owned by the group of individuals or by a member of Federal Reserve System. The commercial bank offer services to individuals, they are primarily concerned with receiving deposits and lending to business. Such bank earns money by imposing interest on the loan borrowed by the borrower. The money that is deposited by the customer will be used by the bank to give business loan, auto loan, mortgages and home repair loans.

4. What are the types of Commercial Banks?

  • Retail or consumer banking

It is a small to mid-sized branch that directly deals with consumer’s transaction rather than corporate or other banks

  • Corporate or business banking

Corporate banking deals with cash management, underwriting, financing and issuing of stocks and bonds

  • Securities and Investment banking

Investment banking manages portfolios of financial assets, commodity and currency, fixed income, corporate finance, corporate advisory services for mergers and acquisitions, debt and equity writing etc.

  • Non-traditional options

There are many non-bank entities that offer financial services like that of the bank. The entities include credit card companies, credit card report agencies and credit card issuers

5. What is consumer bank?

Consumer bank is a new addition in the banking sector, such bank exist only in countries like U.S.A and Germany. This bank provides loans to their customer to buy T.V, Car, furniture etc. and give the option of easy payment through instalment.

6. What are the types of accounts in banks?

  • Checking Account: You can access the account as the saving account but, unlike saving account, you cannot earn interest on this account. The benefit of this account is that there is no limit for withdrawal.
  • Saving Account: You can save your money in such account and also earn interest on it. The number of withdrawal is limited and need to maintain the minimum amount of balance in the account to remain active.
  • Money Market Account: This account gives benefits of both saving and checking accounts. You can withdraw the amount and yet you can earn higher interest on it. This account can be opened with a minimum balance.
  • CD (Certificate of Deposits) Account: In such account you have to deposit your money for the fixed period of time (5-7 years), and you will earn the interest on it. The rate of interest is decided by the bank, and you cannot withdraw the funds until the fixed period expires.

7. What are the different ways you can operate your accounts?

You can operate your bank accounts in different ways like

  • Internet banking
  • Telephone or Mobile banking
  • Branch or Over the counter service
  • ATM ( Automated Teller Machine)

8. What are the things that you have to keep in concern before opening the bank accounts?

Before opening a bank account, if it is a saving account, you have to check the interest rate on the deposit and whether the interest rate remains consistent for the period. If you have the checking account, then look for how many cheques are free to use. Some banks may charge you for using paper cheques or ordering new cheque books. Also, check for different debit card option that is provided on opening an account and online banking features.

9. What is ‘Crossed Cheque’ ?

A crossed cheque indicates the amount should be deposited into the payees account and cannot be cashed by the bank over the counter. Here in the image, number#2, you can see two cross-lines on the left side corner of the cheque that indicates crossed cheque.

10. What is overdraft protection?

Overdraft protection is a service that is provided by a bank to their customer. For instance, if you are holding two accounts, saving and credit account, in the same bank. Now if one of your accounts does not have enough cash to process the cheques, or to cover the purchases. The bank will transfer money from one account to another account, which does not have cash so to prevent check return or to clear your shopping or electricity bills.

BANKING Interview Questions
BANKING Interview Questions

11. Do bank charge for ‘overdraft protection’ service?

Yes, bank will charge on ‘overdraft protection’ services but the charges will be applicable only when you start using the service.

12. What is (APR) Annual Percentage Rate?

APR stands for Annual Percentage Rate, and it is a charge or interest that the bank imposes on their customers for using their services like loans, credit cards, mortgage loan etc. The interest rate or fees imposed is calculated annually.

13. What is ‘prime rate’?

Basically, ‘prime rate’ is the rate of interest that is decided by nations (U.S.A) largest banks for their preferred customers, having a good credit score. Much ‘variable’ interest depends on the ‘prime rates’. For example, the ‘APR’ (Annual Percentage Rate) on a credit card is 10% plus prime rate, and if the prime rate is 3%, the current ‘APR’ on that credit card would be 13%.

14. What is ‘Fixed’ APR and ‘Variable’ APR?

‘APR’ (Annual Percentage Rate) can be ‘Fixed’ or ‘Variable’ type. In ‘Fixed APR’, the interest rate remains same throughout the term of the loan or mortgage, while in ‘Variable APR’ the interest rate will change without notice, based on the other factors like ‘prime rate’.

15. What are the different types of banking software applications are available in the Industry?

There are many types of banking software applications and few are listed below

  1. Internet banking system: Internet banking allows the customers and financial institution to conduct final transaction using banks or financial institute website.
  2. ATM banking (Automated Teller Machine): It is an electronic banking outlet, which allows customers to complete basic transaction.
  3. Core banking system: Core banking is a service provided by a networked bank branches. With this, customer can withdraw money from any branch.
  4. Loan management system: The database collects all the information and keeps the track about the customers who borrows the money.
  5. Credit management system: Credit management system is a system for handling credit accounts, assessing risks and determining how much credit to offer to the customer.
  6. Investment management system: It is a process of managing money, including investments, banking, budgeting and taxes.
  7. Stock market management system: The stock market management is a system that manages financial portfolio like securities and bonds.
  8. Financial management system: Financial management system is used to govern and keep a record of its income, expense and assets and to keep the accountability of its profit.

16. What is the ‘cost of debt’?

When any company borrows funds, from a financial institution (bank) or other resources the interest paid on that amount is known as ‘cost of debt’.

17. What is ‘balloon payment’?

The ‘balloon payment’ is the final lump sum payment that is due. When the entire loan payment is not amortized over the life of the loan, the remaining balance is due as the final repayment to the lender. Balloon payment can occur within an adjustable rate or fixed rate mortgage.

18. What is ‘Amortization’?

The repayment of the loan by instalment to cover principal amount with interest is known as ‘Amortization’.

19. What is negative Amortization?

When repayment of the loan is less than the loans accumulated interest, then negative Amortization occurs. It will increase the loan amount instead of decreasing it. It is also known as ‘deferred interest’.

20. What is the difference between ‘Cheque’ and ‘Demand draft’?

Both are used for the transfer of the amount between two accounts of same banks or different bank. ‘Cheque’ is issued by an individual who holds the account in a bank, while ‘Demand draft’ is issued by the bank on request, and will charge you for the service. Also, demand draft cannot be cancelled, while cheques can be cancelled once issued.

21. What is debt-to-Income ratio?

The debt-to-income ratio is calculated by dividing a loan applicant’s total debt payment by his gross income.

22. What is adjustment credit?

Adjustment credit is a short-term loan made by the Federal Reserve Bank (U.S) to the commercial bank to maintain reserve requirements and support short term lending, when they are short of cash.

23. What do you mean by ‘foreign draft’?

Foreign draft is an alternative to foreign currency; it is generally used to send money to a foreign country. It can be purchased from the commercial banks, and they will charge according to their banks rules and norms. People opt for ‘foreign draft’ for sending money as this method of sending money is cheaper and safer. It also enables receiver to access the funds quicker than a cheque or cash transfer.

24. What is ‘Loan grading’?

The classification of loan based on various risks and parameters like repayment risk, borrower’s credit history etc. is known as ‘loan grading’. This system places loan on one to six categories, based on the stability and risk associated with the loan.

25. What is ‘Credit-Netting’?

A system to reduce the number of credit checks on financial transaction is known as credit-netting. Such agreement occurs normally between large banks and other financial institutions. It places all the future and current transaction into one agreement, removing the need for credit cheques on each transaction.

26. What is ‘Credit Check’?

A credit check or a credit report is done by the bank on a basis of an individual’s financial credit. It is done in order to make sure that an individual is capable enough of meeting the financial obligation for its business or any other monetary transaction. The credit check is done keeping few aspects in concern like your liabilities, assets, income etc.

27. What is inter-bank deposit?

Any deposit that is held by one bank for another bank is known as inter-bank deposit. The bank for which the deposit is being held is referred as the correspondent bank.

28. What is ILOC (Irrevocable Letter Of Credit)?

It is a letter of credit or a contractual agreement between financial institute (Bank) and the party to which the letter is handed. The ILOC letter cannot be cancelled under any circumstance and, guarantees the payment to the party. It requires the bank to pay against the drafts meeting all the terms of ILOC. It is valid upto the stated period of time. For example, if a small business wanted to contract with an overseas supplier for a specified item they would come to an agreement on the terms of the sale like quality standards and pricing, and ask their respective banks to open a letter of credit for the transaction. The buyer’s bank would forward the letter of credit to the seller’s bank, where the payment terms would be finalized and the shipment would be made.

29. What is the difference between bank guarantee and letter of credit?

There is not much difference between bank guarantee and letter of credit as they both take the liability of payment. A bank guarantee contains more risk for a bank than a letter of credit as it is protecting both parties the purchaser and seller.

30. What is cashier’s cheque?

A cashier cheque issued by the bank on behalf of the customer and takes the guarantee for the payment. The payment is done from the bank’s own funds and signed by the cashier. The cashier cheque is issued when rapid settlement is necessary.

31. What do you mean by co-maker?

A person who signs a note to guarantee the payment of the loan on behalf of the main loan applicant’s is known as co-maker or co-signer.

32. What is home equity loan?

Home equity loan, also known as the second mortgage, enables you to borrow money against the value of equity in your home. For example, if the value of the home is $1, 50,000 and you have paid $50,000. The balance owed on your mortgage is $1, 00,000. The amount $50,000 is an equity, which is the difference of the actual value of the home and what you owe to the bank. Based on equity the lender will give you a loan. Usually, the applicant will get 85% of the loan on its equity, considering your income and credit score. In this case, you will get 85% of $50,000, which is $42,500.

33. What is Line of credit?

Line of credit is an agreement or arrangement between the bank and a borrower, to provide a certain amount of loans on borrower’s demand. The borrower can withdraw the amount at any moment of time and pay the interest only on the amount withdrawn. For example, if you have $5000 line of credit, you can withdraw the full amount or any amount less than $5000 (say $2000) and only pay the interest for the amount withdrawn (in this case $2000).

34. How bank earns profit?

The bank earns profit in various ways

  • Banking value chain
  • Accepting deposit
  • Providing funds to borrowers on interest
  • Interest spread
  • Additional charges on services like checking account maintenance, online bill payment, ATM transaction

35. What are payroll cards?

Payroll cards are types of smart cards issued by banks to facilitate salary payments between employer and employees. Through payroll card, employer can load salary payments onto an employee’s smart card, and employee can withdraw the salary even though he/she doesn’t have an account in the bank.

36. What is the card based payments?

There are two types of card payments

  1. Credit Card
  2. Debit Card

37. What ACH stands for?

ACH stands for Automated Clearing House, which is an electronic transfer of funds between banks or financial institutions.

38. What is ‘Availability Float’?

Availability Float is a time difference between deposits made, and the funds are actually available in the account. It is time to process a physical cheque into your account.

For example, you have $20,000 already in your account and a cheque of another $10,000 dollar is deposited in your account but your account will show balance of $20,000 instead of $30,000 till your $10,000 dollar cheque is cleared this processing time is known as availability float.

39. What do you mean by term ‘Loan Maturity’ and ‘Yield’?

The date on which the principal amount of a loan becomes due and payable is known as ‘Loan Maturity’. Yield is commonly referred as the dividend, interest or return the investor receives from a security like stock or bond, interest on fix deposit etc. For example, any investment for $10,000 at interest rate of 4.25%, will give you a yield of $425.

40. What is Cost Of Funds Index (COFI)?

COFI is an index that is used to determine interest rates or changes in the interest rates for certain types of Loans.

41. What is Convertibility Clause?

For certain loan, there is a provision for the borrower to change the interest rate from fixed to variable and vice versa is referred as Convertibility Clause.

42. What is Charge-off?

Charge off is a declaration by a lender to a borrower for non-payment of the remaining amount, when borrower badly falls into debt. The unpaid amount is settled as a bad debt.

43. What ‘LIBOR’ stands for?

‘LIBOR’ stands for London Inter-Bank Offered Rate. As the name suggest, it is an average interest rate offered for U.S dollar or Euro dollar deposited between groups of London banks. It is an international interest rate that follows world economic condition and used as a base rate by banks to set interest rate. LIBOR comes in 8 maturities from overnight to 12 months and in 5 different currencies. Once in a day LIBOR announces its interest rate.

44. What do you mean by term ‘Usury’?

When a loan is charged with high interest rate illegally then it is referred as ‘Usury’. Usury rates are generally set by State Law.

45. What is Payday loan?

A pay-day loan is generally, a small amount and a short-term loan available at high interest rate. A borrower normally writes post-dated cheques to the lender in respect to the amount they wish to borrow.

46. What do you mean by ‘cheque endorsing’?

‘Endorsing cheque’ ensures that the cheque get deposited into your account only. It minimizes the risk of theft. Normally, in endorsing cheque, the cashier will ask you to sign at the back of the cheque. The signature should match the payee. The image over here shows the endorsed cheque.


47. What are the different types of Loans offered by banks?

The different types of loans offered by banks are:

  • Unsecured Personal Loan
  • Secured Personal Loan
  • Auto Loans
  • Mortgage Loans
  • Small business Loans

48. What are the different types of ‘Fixed Deposits’?

There are two different types of ‘Fixed Deposits’

  1. Special Term Deposits: In this type of ‘Fixed Deposits’, the earned interest on the deposit is added to the principal amount and compounded quarterly. This amount is accumulated and repaid with the principal amount on maturity of the deposit.
  2. Ordinary Term Deposits: In this type of ‘Fixed Deposits’, the earned credit is credited to the investor’s account, once in a quarter. In some cases, interest may be credited on a monthly basis.

The earned interest on fixed deposits is non-taxable. You can also take a loan against your fixed deposit.

49. What are the different types of Loans offered by Commercial Banks?

Start-Up Loans

This type of Loan is offered to borrower to start their business and can be used to build a storefront, to acquire inventory or pay franchise fees to get a business rolling.

Line of Credit

Lines of credit are another type of business loan provided by commercial banks. It is more like a security for your business; the bank allows the customer to withdraw the amount from readily available funds in an adverse time. Customer or Company can pay back over time and withdraw money again without going into the loan process.

Small Business Administration Loans

It is a Federal Agency (U.S) that gives funding to small businesses and entrepreneurs. SBA (Small Business Administration) loans are made through banks, credit unions and other lenders who partners with SBA.

50. What is ‘Bill Discount’?

‘Bill Discount’ is a settlement of the bill, where your electricity bill or gas bill is sold to a bank for early payment at less than the face value and the bank will recover the full amount of the bill from you before bill due date. For example, electricity bill for XYZ is $1000; the electricity bill company will sell the bill to the bank for 10% to 20% discount to the face value. Here, the bank will buy the electricity bill for $900 whose face value is $1000, now the bank will recover, full amount of bill from the customer i.e $1000. If the customer fails to pay the bill, the bank will put interest on the outstanding bill and ask the customer for the payment.

51. What is ‘Bill Purchase’?

In ‘Bill Purchase’ the loan will be created for the full value of the draft and the interest will be recovered when the actual payment comes. For example, a ‘Sight draft’ is presented for which the loan is created for 100% of the draft value. The money is received after 7 days, and then the interest will be recovered for 7 days along with the principal amount.

52. What is ‘Cheque Discount’?

Cheque discounting service is offered only by few banks. For instance, if you have a cheque of $3000 outstation and the cheque will take 7 seven days for clearance, then bank will offer you a service for early payment. The bank can make an early payment, but they will pay only for certain percentage of the actual amount, here they will pay you $2000 but they will charge interest on it and the remaining $1000 will be paid, once the outstation cheques get clear.

BANKING Questions and Answers Pdf Download

300+ TOP Banking Interview Questions and Answers

Q1. What Is Repo Rate And Reverse Repo Rate?

Repo rate is the rate :at which banks borrow from RBI during shortage of funds. This is a short term loan provided for upto 90 days by selling securities to RBI and receiving money in lieu of it. Reverse repo rate :is the rate at which banks deposit their excess liquidity with the RBI. In other words, the rate at which RBI borrows from banks by selling securities in order to control excess liquidity in the market is reverse repo rate.

Q2. What Is Brown Label Atm?

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

Q3. What Is Banking Ombudsman Scheme?

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

Q4. Tell Us Something About Bsbda.?

BSBDA stands for Basic Savings Bank deposit account. BSBDA is the new name for “no-frill accounts” under which anyone can open a bank account with even zero balance in it or “zero balance account”. This BSBDA is aimed at providing banking facilities to weaker section of the society and improve financial inclusion.

Q5. What Is A Private Bank?

Banks which are owned and run by individuals are called private banks. Example: karnataka bank, karur vysya bank, lakshmi vilas bank etc.

Q6. What Is Para Banking?

Para Banking includes all the services provided by banks apart from day to day banking. For example:  Debit cards, Credit cards, Life Insurance products, Cash Management services etc.

Q7. Please Discuss Your Views About The Changes In Banking Scenario?

Banking sector has successfully been adding new products and innovative services to its basket of products being offered to retail customer and institutional customers. I think the banking sector will keep its goal to accelerate the growth. Secondly each bank would like to optimize its costs of marketing and distribution so as to keep its overheads low without affecting its reach or quality of services. With regards to changes, I feel that there would be marketing strategy which would be “socially engaging”. The leading banks would adopt “Intelligent Multichannel” approach over their brick and mortar branch banking

Q8. What Is Bank Rate?

It is same as repo rate but here the time period is for more than 90 days.

Q9. Why Should A Company Prefer Equity Finance To Debt Finance?

Equity financing is less risky (you won’t have to pay it back). You’ll have more cash on hand. You won’t have to channel profits into loan repayment. Your equity investors will have a longer term view. Your company will have more credibility. And you might get to tap your investors’ network to help you develop the business.

Q10. In The Changing Banking Scenario, What Are The Most Important Needs Of The Banking Industry?

We are living in a digital age, where everyday technological innovations our style of living, doing the business and even the way we do a commercial traction. The banks will have to catch up and offer (a) Multi Channel Optimization (b) Digital Distribution and most importantly (c) Effective Sales Efforts.

Q11. What Are Industrial Banks?

The main purpose of industrial banks is to provide big lo to large scale industries. Examples: IDBI bank, Industrial bank of India etc.

Q12. What Are The Non Performing Assets Of A Company?

A NPA is an obligation payable to the bank which has not been made or the interest and principal amount has not been paid on the due time. NPA is the loan or credit provided by the bank to its customers which could not be recovered in due time. NPA is also known as “bad debts”.

Q13. What Is Statutory Liquidity Ratio (slr)?

SLR is the amount of NDTL which a bank needs to maintain in the form of cash, gold or govt. securities before providing credit to its customers. Through SLR, RBI makes sure that bank always have a reserve amount out of their deposits to meet any future contingencies

Q14. What Is The Difference Between Micro Finance And Micro Credit?

Micro credit is giving a small amount of loan to the customers whereas MicroFinance is a wide term. It includes small loan + training on financial matters. In other words, Microfinance= Microcredit + Financial Literacy.

Q15. What Is White Label Atm?

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

Q16. What Is A Nationalized Bank?

Banks which are owned and run by government of India are called as nationalized banks. Example: Canara bank, syndicate bank, Vijaya bank, etc.., There are total 20 nationalized banks. State bank of India has got 7 subsidiaries they are State bank of Hyderabad, State bank of Mysore, State bank of Travancore, State bank of Indore, State bank of Saurashtra, State bank of Bikaner, state bank of Jaipur.

Q17. What Are Foreign Banks?

Banks which are foreign originated [based] are called foreign banks Example: Citi bank, YES bank etc.

Q18. What Is Rbi [reserve Bank Of India], When It Is Established And What Are Its Functions?

RBI established in 1935, its head office in Mumbai. Present Governor of RBI “ D. SubbaRao”. Its functions: Issues currency notes Acts as bankers bank Maintains foreign exchange reserves Maintains CRR and SLR RBI is also called as “bankers bank”, because all banks will have a/c’s with RBI. It provides funds to all banks hence it is called as BANKERS BANK.

Q19. What Is Cash Reserve Ratio (crr)?

CRR is the part of Net Demand and Time Liabilities (NDTL) or cash of the bank deposited with the RBI. A higher CRR makes lo expensive as liquidity is controlled by RBI. NDTL is the deposits of the customers with the bank.

Q20. What Is Bank?

Bank is financial institution which accepts deposits from the public for the purpose of lending.

Q21. What Are The Components Of The Monetary Policy Of Rbi?

The components of monetary policy include CRR, Repo rate, reverse repo rate, SLR, MSF and Bank Rate.

Q22. What Are Cooperative Banks?

The main purpose of cooperative banks is to co-operate small scale industries, and to provide small lo. Example: karimnagar dist co-op bank etc.

Q23. What Are The Steps Taken By Banks To Promote Financial Inclusion?

Publicity of banks so that more and more people open the accounts. BSBDA so that poor people can also open their account. People with agriculture land are being provided with Kisan Credit Card. General Purpose Credit card provided to people with no agricultural land where maximum limit of withdrawal is Rs.15,000 and rate of interest is 4%. Ultra small banking and banking correspondents. CRISIL has made an index to calculate financial inclusion named as “CRISIL INCLUSIX” and in June 2013, there was 40% financial inclusion as per the index.

Q24. Types Of Accounts In Banks?

Saving bank account [SB a/c]: The main purpose of SB a/c is to encourage small savings from the public. Interest paid on SB a/c is 3 percent. Any individual can open SB a/c. An Indian residing at abroad can open a NRI a/c. NRI represents non-resident Indi. Current account: It’s a running and active account. No interest is paid on current a/c. Current accounts can be opened on firm names. Even individuals can also open current a/cs. But on firm names you cannot open SB a/c. Fixed Deposit account: Amount is kept for a fixed period. Higher rate of interest will be paid on this a/c. Recurring deposit [RD a/c]: A fixed amount can be deposited in monthly installments. Interest rate is same as fixed deposits.

Q25. What Is Priority Sector Credit?

All Indian banks and foreign banks (which have more than 20 branches in India) are required give 40% of their credit to priority sector out of which 18% is for agriculture. In case of Regional Rural Banks, 60% credit is to be given to priority sector.

Q26. What Is The Difference Between Fii And Fdi?

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

Q27. What Is Capital Adequacy Ratio? What Is Demat Account?

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

Q28. Types Of Banks?

Nationalized banks Private Banks Foreign banks Regional rural banks Co-operative banks Industrial banks etc.

Q29. What Is The Difference Between Nationalized Banks And Private Banks?

A nationalized bank is owned by the govt. of that country and is also known as Public Sector Bank whereas a private sector bank is owned by an independent individual or company.

Q30. When Banks Are Nationalized?

In 1969 : 14 banks were nationalized. In 1980: 6 banks were nationalized.

Q31. What Is Marginal Standing Facility (msf)?

In MSF, banks borrow money from RBI for upto 24 hours. MSF is always 1% above the repo rate and banks can draw only upto 25 of their NDTL from RBI.

Q32. What Is Rtgs And Neft?

RTGS: Real Time Gross Settlement. NEFT: National Electronic Fund Trfer. These two are the two methods through which funds can be trferred from one bank to another bank.

Q33. Define Capm?

CAPM is the capital asset pricing model, and it is a model designed to find the expected return on an investment and therefore the appropriate discount rate for a company’s cash flows. It provides the required rate of return given the riskiness of the asset.

Q34. What Is The Difference Between Cheque And Demand Draft?

Cheque is a negotiable instrument which is paid to the bearer but a demand draft is a negotiable instrument always payable on order.

Q35. What Is Inflation And Deflation?

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

Q36. What Is The Cad? What Is Fiscal Deficit?

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

Q37. What Is A Non -banking Financial Company (nbfc)?

A NBFC is a company registered under the companies act, 1956 which is involved in the business of lo, shares/stocks, etc. Non-banking financial companies are financial institutions that provide banking services, but do not hold a banking license. These institutions are not allowed to take deposits from the public. NBFCs do offer all sorts of banking services, such as lo and credit facilities, retirement planning, money markets, underwriting, and merger activities.

Q38. How Do You Boost Returns In An Lbo?

The key levers are: a lower purchase price, a higher exit price (when the company is sold on), increased leverage. improving the way the company operations, or getting cheap financing.

Q39. What Is Accretion And Dilution?

Accretion is asset growth through addition or expion. Accretion can occur through a company’s internal development or by way of mergers and acquisitions. Dilution is a reduction in earnings per share of stock that occurs when additional shares are issued or the stock changes into convertible securities.

Q40. What Are The Various Risks That Banks Face?

There are mainly three types of risks faced by banks:- Credit Risk:  loan or NPA. Market Risk:  Money invested in the market. Operational risk:  Day-to-Day working risks.

Q41. What Is Financial Inclusion?

Financial inclusion is the availability of banking services at a affordable cost in order to include the weaker section of the society in the banking system.

Q42. We Hear Regularly That All Bank Branches Are Turning Cbs. What Is Cbs?

CBS stands for CORE banking solutions under which the branches of the banks are interconnected with each other through intranet with a central database server. The CORE word in CBS stands for Centralized Online Realtime Exchange.

Q43. Tell Us Something About Nabard And Its Functions?

NABARD was established by an act of Parliament on 12 July 1976 as National Bank for Agricultural and Rural Development. It is the apex bank to provide rural credit and monitor the RRBs. The main functions of NABARD are:- Provide refinance to RRBs and other banks in rural areas for lending. Acts as a subsidiary for RRBs and co-operative banks.

Q44. Name A Few Poverty Eradication Schemes Of Govt. Of India?

Food Security bill, MNREGA, Sarva Shiksha Abhiyan, Antyodaya Yojana, JNNURM, Swavalamban Yojana, Nirmal Gram Yojana, Rajiv Awas Yojana, Indira Gandhi Pension plan etc.

Q45. What Is Term Repo?

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