300+ TOP Commercial Banking Interview Questions and Answers

Q1. What Is The Meaning Of Capital Adequacy Ratio (car)?

Percentage ratio of a financial institution’s primary capital to its assets (lo and investments), used as a measure of its financial strength and stability. According to the Capital Adequacy Standard set by Bank for International Settlements (BIS), banks must have a primary capital base equal at least to eight percent of their assets: a bank that lends 12 dollars for every dollar of its capital is within the prescribed limits.

Q2. Describe The Other Types Of Banks?

Central banks are normally government owned and assigned with regulatory responsibilities, such as supervising commercial banks or controlling the cash interest rates etc. Islamic Banks are established in accordance of concepts of Islamic Law. This form of banking revolves around several well established principles based on Islamic canons.

Q3. List The Banks Under Retail Banks?

Commercial Banks Community Banks Credit Union Banks Postal Saving Banks Ethical Banks

Q4. What Is Cash Reserve Ratio?

Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is set according to the guidelines of the central bank of a country.

Q5. State The Discussion On Liquidity Vs Profitability?

Profitability is the relationship between profits and capital (the “static” resources set aside to earn those profits). Measuring profitability me that you have to relate a profit figure (from the Profit and Loss Account) to a resources figure (from the Balance Sheet). Liquidity may be defined as the ability of a firm to meet its financial obligations as they fall due. The balance sheet (defined as “a structured statement of assets and liabilities”)measures these resources and claims.

Q6. Name The Two Expert Committees Which Were Set Up In 1990s?

The first Narasimham Committee was appointed by Manmohan Singh as India’s Finance minister on 14th August 199@And the second one was appointed by P.Chidambaram Finance minister in December 1997.

Q7. What Are Investment Banks?

An investment bank (IB) is a financial intermediary that performs a variety of services. Investment banks specialize in large and complex financial tractions such as underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and other corporate reorganizations, and acting as a broker and/or financial adviser for institutional clients.

Q8. State The Sources And Application Of Funds Of Commercial Banks?

Sources of Funds: Share Capital Reserves and Surplus Deposits Borrowings Application of Funds: Cash and cash Balance with RBI Cash balance with other banks Investments Advances Source

Q9. Give The Functions Of Commercial Banks?

(1) Primary Function: Accepting Deposits Advancing of Lo Credit Creation (2) Secondary Function: Agency Functions Public Utility Functions

Q10. State The Role Commercial Banks?

Mobilizing Saving for Capital Formation Financing Industry Financing Trade Financing Agriculture Financing Consumer Activities Financing Employment Generating Activities Help in Monetary Policy

Q11. What Is The Meaning Of Non Performing Asset (npa)?

A loan or lease that is not meeting its stated principal and interest payments. Banks usually classify as nonperforming assets any commercial lo which are more than 90 days overdue and any consumer lo which are more than 180 days overdue. More generally, an asset which is not producing income.

Q12. State The Purpose Of Narasimham Committee?

To study all aspects relating to the structure and procedures of the financial systems. To recommend improvements in their efficiency and productivity. To reform the Indian Banking sector.

Q13. Give The Meaning Of Combined Banks?

Combined Banks are also called as Universal banks. These are commonly known as financial services companies; engage in several of diversified financial services.

Q14. State The Principles Of The Investment Policy Of Commercial Banks?

Liquidity Profitability Safety Diversity Stability of securities

Q15. Describe The Nature Of Commercial Banks?

Commercial Banks are the organizations which cater certain financial tractions. Its aim is to earn profit. Tractions are socially and legally approved. Responsible for customer deposits in the bank. Established and operated under the control of central bank of a nation.

Q16. What Is The Meaning Of A Bank?

An establishment authorized by a government to accept deposits, pay interest, clear checks, make lo, act as an intermediary in financial tractions, and provide other financial services to its customers.

Q17. State The Meaning Of Commercial Banks?

A commercial bank is a financial institution that provides services, such as accepting deposits, giving business lo and auto lo, mortgage lending, and basic investment products like savings accounts and certificates of deposit.

Q18. Give The List Of Commercial Banks In India?

List of Commercial Banks in India: Reserve Bank of India  Abu Dhabi Commercial Bank  Allahabad Bank.  Andhra Bank  Bank of India  Bank of Madura  Bank of Punjab  Canara Bank  Chinatrust Commercial Bank  Citibank  City Union Bank  Corporation Bank