Bank personal interview questions and answers

Tell me something about yourself?

Generally this is the first question which is put up in front of the candidate appearing in the interview. To answer this, the candidate must tell his name, place of residence and his current work or educational degree along with a very brief note on his family-father, mother and siblings. He/she can also tell about his father or mother’s occupation. Some key points to note here are:-

He must know the meaning of his name and specific reference with his name if any. For ex:- a boy named “Prashant” was asked about the geographical connection of his name i.e. Prashant Mahasagar or Pacific Ocean.

The answer should be precise and questions like- if your father is a teacher then why do you want to become a banker? can come up from your answer to the first question. Be prepared with the answers to these expected questions.

Because this is the first question so the candidate must give a short and effective answer. You might be nervous at the beginning but remember to keep a smile on your face.

Where have you come from and what is famous in your city?

The candidate must tell about his place of living- city and state. If the board further asks about any specifications, then name of the district etc. should be told. He/she must tell about the famous things of his place. For ex:- a candidate from Lucknow may tell about Imambara, chicken clothes, “tehzeeb” of Lucknow etc. The key things to deal this question effectively are:-

– The candidate must know about the local MLA and MP from his area. If any renowned personality belongs to that area, you should be aware of the details.

– He must have full knowledge about that place, its history, famous monuments, personalities, rivers, at times even number of railway stations in the city etc., also about the politics of that state-CM and ruling party and all other nitty gritties of his place.

For ex: – A candidate from Ghazipur, U.P. was asked about cultivation of “Poppy seeds” as Ghazipur is famous for cultivation of poppy seeds.

– At times, questions about local politics are also put forward like a candidate, from Amethi was asked about the electoral battle between Rahul Gandhi and Kumar Vishwas form Amethi.

– A good answer to such questions leaves a very positive impact on the board as it demonstrates your awareness about the surroundings and the fact that you are well prepared puts you ahead of others.

Why do you want to join the banking industry?

To answer this question, you can say something like –“I want to join this industry because it can provide me a stable career with good growth prospects. It is one of the fastest growing sectors of the nation and provides great career opportunities.

There could be many other reasons for you wanting to join the bank industry for e.g. it is an honest organization, good working conditions, chances to directly interact with public etc. The choice of reason could be anything that suits you as a person.

This is a very commonly asked question and you must be prepared to answer it.

Please tell us about your strength and weaknesses?

Here, the answers vary from candidate to candidate. But the strength and weakness should be such that they match up to or are in synchronization with the personality of the candidate. For ex:- If a candidate says that his strength is is general awareness while in reality he possesses least knowledge of current affairs – cross questioning can easily unveil him and could actually land him in trouble. Some key things to answer this question effectively are:-

– Try to put forward a strength which is useful in the banking sector. For ex: – good communication skills, adjustable etc. The strength should bring about a positive aspect of your personality in front of the board.

– This is a question from which you can actually turn the interview in your favour. For ex:- If you say something like, “I have won many awards in debate competitions so I would think that good oratory skills are my strength.”

– This way I can inform the board about my previous achievements also and can get an advantage over others.

– They may ask how your quality/strength will be helpful to bank. Be prepared with an answer.

– Weakness should not be very negative like short temper, irregular etc. as they leave a bad impression.

– Remember, this question is the golden chance for you to turn the ball in your court. In the answer you must introduce all your unique talent in front of the board. So that the interview enters in your own comfort zone.

After doing B.Sc / B.Tech / MBA / MA why do you want to choose banking? Why not something related with you field of education?

You must give honest and sensible answers to such question. For ex:- A MBA candidate may say that there are hardly good jobs in MBA as of now. Banking is a safe sector providing great employment opportunities. In the answer, you must show your keen interest in joining banking sector and it should not look like you don’t have an option so you are choosing it.

You can also expect some questions from academics. A science stream student may be asked about about Newton’s Law etc. So, you must also prepare the subjects studied by you in the degree.

What are the basic documents a person requires to open an account?

The RBI has advised banks to follow the Know Your Customer (KYC) guidelines where some personal information of the account holder is obtained by the bank. This information includes: – photograph, proof of identity and proof of address. In 2013, AADHAR cards and MNREGA cards are included in KYC papers. Without these documents a person can’t open his account.

Key points:-

– The interviewer might ask whether you have a bank account or not.

– It is preferable to have an account and to know about the process because it will only help you if such questions come up.

Who is the governor of RBI?

As of today (March’14), you can answer this as, Mr. Raghuram Govind Rajan is the 23rd governor of RBI. Before taking reins as RBI governor he was an officer on special duty in RBI. He has also served as economic advisor in PMEAC. His tenure is of 3 years ending in September 2016.

Key points:-

– In IBPS interviews, you must have a quick read about the prominent personalities of banking industry, especially governor and deputy governors of RBI.

– You must address the name of personalities by using Mr. or Madame in case of male and female respectively.

– Try to keep yourself updated about the recent happenings of at least the month prior to interview.

Tell us something about the 27th or latest public sector bank in India.

Sir, the 27th public sector bank in India is Bhartiya Mahila Bank. It was created by Finance Bill 2012. The first BMB was opened in Mumbai on 19th November 2013 on the 94th birth anniversary of Indira Gandhi. India is the third country in the world to have a bank especially for women after Pakistan and Tanzania.

– Tagline- “women empowerment economically”.
– Head- Usha Anantha Subramanayam
– The bank allows deposit from everyone, but lending will be focused for women.
– This bank is very important because it is the latest and 27th PSB of India. So, try to know every basic point about BMB.
Initial capital of Rs. 1000 crore.

Similarly, if there has been some other initiative in that year, you should be well aware of it.

What do you understand by the GDP of the country?

The final value of all the goods and services produced under the geographical area of a country is the Gross Domestic Product of that country. GDP is calculated at consumption, investment and exports and imports are subtracted from the sum of these three.

Who are the Bharat Ratna awardees, 2014?

Sir, Mr. Sachin Tendulkar and Mr.C.N.R rao are the two recent awardees of Bharat Ratna award. Both of them are the 42nd and 43rd recipients of the award. CNR Rao received the award for his contribution in the field of chemistry whereas Mr. Tendulkar received the award for his contribution in the game of cricket. Also, he is the first sportsperson to have recived the highest honor of India.

What is a Non -banking Financial Company (NBFC)?

Difference between NBFC and banks?A NBFC is a company registered under the companies act, 1956 which is involved in the business of loans, 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 loans and credit facilities, retirement planning, money markets, underwriting, and merger activities. The basic difference between bank and NBFC is:-

– They can’t accept demand deposits.
– They are not a part of the payment and settlement system and can’t issue cheques drawn on themselves
– They are not registered in the banking act and don’t have a banking license.
– They don’t have to maintain CRR, SLR or CASA like banks.

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.

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. Thus NPA is somehow not yielding any income to the lender either in the form of principal or interest payments. NPA is also known as “bad debts”.

NPA is shown at the assets side of the balance sheet whereas deposits are shown at the liability side.

If there is any recent story or news regarding NPA, then revise it thoroughly. For ex:- Recently, United bank of India was marred in loss due to its rising NPA. So was the case with Kotak Mahindra Bank.

What are the various risks that banks face?

Sir, 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.

What do you mean by term “CASA” related to bank?

CASA stands for Current Account Savings Account. The CASA ratio shows how much deposit a bank has in the form of current and saving account deposits in the total deposit. A higher CASA ratio means better operating efficiency of the bank because on current account there is no interest payable whereas on savings account a tiny 3.5% interest is payable by the bank. CASA ratio shows how much of the deposit of the bank comes from the current and savings deposit.

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.

What are the parts of banks’ capital?

Bank has following parts of capital:-

– Tier 1 capital: – Paid up capital (core capital) + Reserves (owners or promoters’ fund)
– Tier 2 capital: – Secondary Capital (borrowed funds) + general loss reserves + subordinated term debts + undisclosed reserves (can’t be maintained in India)
– Tier 3 capital: – Same as tier 2 capital but with a higher amount in order to face the market risks of the bank.

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. All scheduled commercial banks in India including foreign banks with branches in India have to avail BSBDA. Important:-

– Such accounts are opened with “relaxed KYC norms”.
– Relaxed KYC norms include an affidavit by the Pradhaan or councilor of a village or area confirming about the person concerned.
– In such accounts there are certain restrictions- in a month, 4 withdrawls can be done at a maximum. This includes ATM withdrawls. The amount withdrawn in a month shouldn’t exceed Rs. 10,000 and the balance in the account at anytime shouldn’t exceed Rs. 50,000.

What is the meaning of “base rate”?

Base Rate is the minimum rate of interest which a bank has to charge from its customers and a bank can’t sanction loan on a rate below the base rate. This rate came into effect from July 1 2010. Before Base rate there was Basic Prime Lending Rate or BPLR introduced in 2003. It was replaced with Base Rate because in BPLR banks had an option to loan their special customers below BPLR. Banks may choose any benchmark to decide on the base rate. The exceptions of base rate are:-

– Agriculture loans
– Govt. sponsored schemes
– Staff loans
– Only under the above cases, bank can lend below base rate.

Only under the above cases, bank can lend below base rate.

We hear regularly that all bank branches are turning CBS. What is CBS?

Sir, CBS stands for CORE banking solutions under which the branches of the banks are interconnected with each other through intra net with a central database server. Now, with this facility, a person having an account in a certain branch of the bank can operate from any other branch of the same bank. He need not visit the same branch to operate his account. The CORE word in CBS stands for Centralized Online Realtime Exchange.

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.

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.

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. Priority sector includes- Agriculture, Micro and small enterprise, Education loan (upto 10 lakh for study in India and upto 20 lakhs for study in foreign nations) and housing loan. Priority sector lending is one of the most important part of a bank’s lending and it is devoted towards those sector which are important for public welfare.

What is the difference between Micro finance and micro credit?

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

What is financial inclusion? – (One of the most important questions).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. In 2004, Kofi Annan (UNO Head) was addressing UNESCO conference and the word “Financial Inclusion” was for the first time used by him at that time. In 2006, a committee was made under the chairmanship of Mr. HR Khan for financial inclusion and the report said that 57% of Indian population was deprived of banking facilities.
What are the steps taken by banks to promote financial inclusion?

1. Publicity of banks so that more and more people open the accounts.
2. BSBDA so that poor people can also open their account.
3. People with agriculture land are being provided with Kisan Credit Card.
4. 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%.
5. 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.

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.

Liquidity Adjustment Facility (LAF) introduced in 2000 has a provision that reverse repo rate will be 1% less than the Repo rate.

What is Bank rate?

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

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 loans expensive as liquidity is controlled by RBI. NDTL is the deposits of the customers with the bank. Net demand liabilities are deposits payable on the demand on customer, or when the customer wants. Ex:-current account, savings account. Time liabilities are the deposits which are payable only on a specific time or after a period of maturity. For ex:- Fixed deposits, Recurring Deposits.

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

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.

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.

What is white label ATM?

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

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.

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.

It has two subsidiaries:-

– NABFINS:- NABARD financial
– NABCON: – NABARD consultancy.

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.

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.

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.

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.

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.

Name a few poverty eradication schemes of govt. of India.

Food Security bill, MNREGA, Sarva Shiksha Abhiyaan, Antoday Yojana, JNURRM, Swalamban Yojana, Nirmal Gram Yojana, Rajiv Awas Yojana, Indira Gandhi Pension plan etc. (Also read in detail about these schemes.)

Apart from the questions listed above, the candidate needs to thoroughly read about the latest happenings at the time of his interview. He must read the newspaper of the very day of his interview because there have been many instances where the board asks the news of that day.

He needs to prepare a full note about RBI, and types of banks, functions of RBI, and the latest monetary policy given by RBI etc. and many other banking terms and facts, insurance facilities provided by banks, important bills like food security bill, RTI etc.

Candidate must remember that personal questions are the most important part of the interview as they give you the scope to stand different from others. The key points following the answers are very important. So, bear them in mind and prepare accordingly.

More questions to prepare –

1. What do you know about “Pradhan Mantri Jan Dhan Yojana”?
2. What is MUDRA Bank? Why was it started?
3. What is BANDHAN Bank? How is it different from other public and private banks?
4. Tell us something about ADB? Who are its members?
5. Highlight various skill development schemes recently started in India.