Letter To New Shareholders And Reply Slip: Fill & Download for Free

Part: 001Tips for Interview for recruitment as officers in banks in IndiaInstructions to candidatesThe purpose of the interview:The purpose of any interview is to select one suitable person for the concerned post. The person to be interviewed may be having better qualifications; however, he may not be having the requisite potentials or caliber in handling the job offered namely; better communication ability, leadership quality, emotional strength and efficient interpersonal relationship. Banking demands people who are willing to work hard by mingling with customers freely and friendly apart from maintaining a cordial; ssocial and friendly relationship with their colleagues and superiors.Phases of the interview:The interview is conducted in four phases namely;·the first phase during the course of which questions are asked about the person and his specialization in any area;·the second phase wherein questions are asked about the bank for which the interview is conducted;·the third phase wherein questions are asked about general banking, economy, finance and latest developments are asked and·the fourth phase is the final round for the interview.The interview committee:The interview committee consists of three to five imminent personalities who are well versed in banking matters and normally the services of executives or retired executives of various public sector banks are utilized for the purpose of conducting the interview. The following system is adopted by the committee members during the course of interview process:·While one member poses questions to the candidate, the other two members analyze the body language of the individual as to how he reacts to the questions and especially in respect of difficult questions;·They also review as to how the candidate comes forward to present the answers in a crisp manner thereby providing the relevant points expected by the committee members.·Basing upon the answering ability, communication ability, level of confidence, willingness to accept challenges etc., the committee members select the individuals by awarding better grades.·When the candidate is found to be inattentive on account of low level of self confidence, the committee members pose provoking questions so that the candidate is emotionally provoked to come forward with appropriate answers.The interview process:The interview process consists of the following stages:·Verification of the certificates namely; qualification certificates, experience certificates, certificates relating to extracurricular activities etc., by the team members and filling up of the requisite formats by the candidates;·Candidates waiting at the reception hall for their turn;·Candidate entering the interview room duly seeking permission of the team members;·Candidate thanking the interview members for permitting him/her inside the cabin;·Candidate sitting on the seat once offered by one/more members in the interview committee;·Candidate thanking the person who had offered the seat;·Candidate shaking his hands with the members, if offered;·Candidate eagerly awaiting for the questions from the members;·Candidate trying to attend the interview with full concentration maintaining regular eye contact with the interviewers;·Candidate answering the questions posed by the members till the entire process is treated as completed;·Candidate collects all certificates and documents once the interview is treated as completed;·Candidate thanks the committee members and·Candidate politely raises from the chair, walks towards the entrance, opens the door and gently closes the door;·Candidate meets other candidates awaiting at the reception hall cheerfully.Dress code:·Dress code is more important and a person is judged by the dress he wears. Dress makes half man.·For men: Please wear a neat trouser and one full length shirt – preferably white or light shaded; Usage of “T” shirts greatly dampens the image of the candidate and the purpose of using any ‘T” shirt is to have better comfort during the course of walking, relaxing, jogging, running, partying and relaxing. As such “T” shirts are not considered to be a fit wear during professional meetings including interviews. The candidate has to wear a good quality shoes neatly polished. If possible he can wear a “tie” and this is purely optional and certain organizations pay more attention to the personality which gets improved by way of better dressing.·For girls: Under any circumstances girls should not wear provoking dresses namely; “T” shirts, jeans pants, trousers, half gowns and shirts with messages and blouses with low cuts. A neat chudithar is considered to be the best option and wearing of sarees improves the image of the individual.A.Questions during the first phase:·Initially the candidates are invited to tell about themselves, their family members, their ambitions, their qualifications, their achievements in studies, sports, music and any other extracurricular activities;·The second question is about the place to which the candidate belongs. In case the candidate belongs to Chennai, he will be asked to tell about Chennai and the importance of the place. Necessarily the candidate should have a thorough knowledge about the place from which he is hailing;·The interviewers will pose “ice breaking questions” in order to shift the focus of the candidate. This is for the purpose of finding out the reaction of the candidate during such “focus change”. (Banks demand people who are able to face any challenges);·During the first two to three minutes, more than 80 percent of the questions will be on the personal details and basic information about the candidate. It has to be remembered that – “The first impression is the best impression” and accordingly the candidate has to behave politely, calmly, courageously and confidently.Sample questions during the first phase:·01. My dear friend, now tell us about yourself: The candidate has to inform in a crisp manner about himself, his family, his qualifications, achievements if any etc. Unnecessary details should be avoided altogether and the candidates at no cost should provide information to the committee members with an intention to derive sympathy from the committee members. Such an attitude will prompt the members either to reject or award poor marks.·02. I see – you are from Chennai – please tell me about Chennai: Since the candidate belongs to Chennai, he is invited to tell about Chennai and he should have pre-hand information about Chennai and should come forward to tell about important places in Chennai namely; Marina beach, High Court, Kabaleeswarar Temple, Metro train facilities, Santhome church, International airport, Asia’s biggest bus station at Koyembedu and many more.·03. I find that you had studied in Presidency college. Why you preferred this college ?. How was your life in the college? The candidate has to tell about the college; the achievements of the college in academic scenario as well as in sports and in other areas;·04. I find that you had studied “EEE” - why you had chosen the course? The candidate has to tell about the purpose and the potential available for the students who had opted to pursue EEE course.·05. You are in Chennai for a long period. What is your opinion about Chennai?·06. You are having “EEE” in engineering and why you are willing to get employed in banks? (Your reply should be – In fact by working in a bank, I can develop my relationship with customers, improve my knowledge and provide better service to as many people as possible. I find that I can have more career prospects by getting employed in the banks)·07. What are your strengths and weaknesses? – Your answer should be: I am always willing to work hard under all circumstances and since I have a good communication ability, I hope that I can surely develop friendship with my colleagues, clients and others in a fast manner so that I can contribute better to the society.·08. You are a highly qualified person having one MBA degree apart from a degree in Engineering. What is the guarantee that you will be in the bank for quite a long time without shifting your attention to some other employment potential after some time ?: Your reply should not be: On account of unemployment problem, I am joining the bank; Your reply should be – even though I have better qualifications, I wish to work in the banking industry because I can have better opportunities to serve for the welfare of the society by working in the bank than any other organisations.Responsibilities of the candidates appearing for the interview:The candidate should do a home work and he should always depend upon his positive straits namely; his strength, achievements and abilities and necessarily he should believe in himself that he can accept and do the job in a better manner and he should altogether avoid any negative reply or angry reply under any circumstances; even when provoked or tempted by the interview board members and the candidate should remain calm and wear a broad smile during the entire interview process.A smile has the power to keep the individual in better spirits at all times.The following question may provoke the candidate –·Dear friend, considering your personality, I find that you look like a film actor. How do you feel yourself ?(You had not at all expected this question and you are tempted to provide an apt reply to them: Your reply should be– In fact I am fond of wearing a neat dress and I take care of my health by doing physical exercises regularly apart from eating moderate food and getting into the bed at the appropriate time. I always believe in the following proverb – “Health is wealth”. An individual may not be in a position to discharge his duties properly without adequate health.B.Second phase of the interview process:During this phase, questions will be asked about the bank for which the candidate is appearing for the interview and the following are some sample questions in case the candidate is appearing for a post in Punjab National Bank:·Do you know – where is the head office of Punjab National Bank?·Who is the present chairman of the bank?·How many branches are there in Punjab National Bank as on date?·Can you tell me about the total business of the bank?·Can you tell me about some deposit schemes available in the bank?·What do you know about the logo of Punjab National Bank?·What is the punchline of Punjab National Bank?·What is the position of Punjab National Bank among the nationalized banks as on date?(It is the responsibility of the candidate to collect the basic information about the bank for which he is appearing for the interview by visiting the website of the bank and referring other material sources in order to get the required information about the bank namely; the headquarters, number of branches, total business, profit position, important schemes, tie up with another banks, achievements of the bank, if any; the present position and ranking of the bank in terms of business, profitability, non performing assets, productivity of the employee etc., In case the candidate is appearing for a group of banks, he should have information in general about all the banks in the group)C.Third phase of the interview:During this phase, questions will be asked on general banking practices as mentioned below:The following are the questions regarding the banks in general:·Have you visited any bank branch? What was your experience?·What is the business of any bank?·What are the essential/primary functions of any bank?·What are the secondary functions of any bank?·Who can open a savings bank account?·What do you know by KYC guidelines?·Why banks insist customers in adhering to KYC guidelines?·What is the difference between Current deposit account and Savings deposit account?·What do you mean by CASA account?·Who normally opens a current account?·What do you know by a fixed deposit account?·Can a company open a savings account?·Can the director of a company open a savings account?·Who is the controlling authority for the banks in India?·What is a foreign bank?·What is meant by a public sector bank?·Which is the largest private sector bank in the country?·Which is the largest bank in the country?·You are working as an officer in savings department. The customer complains about the irritating behavior of the clerk who is working under your supervision. What will you do in this situation?·Your manager delegates some work and you are failing in doing the work within the allotted time and your manager is not happy with your performance. How will you convince your manager?·Today there is some news about annual credit policy. What do you know by that?·What do you know by reverse repo rate?·What is called as inflation?·What is rupee convertibility?·What do you know by gross domestic product?·What do you know by ASBA?·What do you know by Sensex?·What do you know by a convertible debenture?·What is an initial public offer?·What do you know by facebook – whether it is good or bad for any individual and what is your opinion?·What are the advantages and disadvantages of Whatsapp?(The above questions are illustrative and not exhaustive and the candidate should know fairly well about many banking as well as general aspects)D.The fourth phase of the interview:Like the initial phase or first phase, this fourth phase is also important wherein tricky questions will be asked as mentioned below:·You are hailing from Coimbatore. In case you are posted to Chennai whether you will be willing to work at Chennai. (Your answer: If I am posted at Coimbatore, I shall try my level best to bring more business to the bank since I know the place and people well and I can take care of family members who are dependent on me)·Suddenly on account of computer crash, you have to sit late – whether you will be willing to sit late and finish the job or leave early without informing your superiors? (Definitely I will never mind in sitting late and I shall always cooperate with my superiors in finishing the day to day functions of the branch. I am one among the team members and I have the responsibility to cooperate with other members during critical situations)·What information are you willing to tell about yourself? (If I am selected, I shall work hard and I shall discharge my duties to the entire satisfaction of my superiors. I shall always do the best from my side)Part: 002Selected Interview QuestiomsCandidate: 00101.Why you are willing to join in a bank?02.What do you mean by appraisal of gold loans?03.What are the different kinds of term deposits available in a commercial bank?04.What is the minimum period for which a fixed deposit is accepted and the maximum period for which a fixed deposit is accepted?05.Whether a fixed deposit can be accepted for a period more than ten years?06.What do you mean by FERA?07.What do you mean by ECS?08.What is the minimum amount that can be sent through RTGS?09.What is the maximum amount that can be remitted through NEFT?10.What is the maximum amount that can be sent abroad by any resident individual?11.What is the name of apex bank which is responsible for the development of agriculture in the country?12.What are the different kinds of schemes available in our country aiming towards poverty alleviation?13.What do you mean by crossing of any cheque?14.What are the different kinds of crossing?15.What do you mean by CASA?16.Whose signature is available in Rs. 100/- currency note?17.What do you know by dividend?18.Bank holidays are declared according to which act?19.Banks are functioning according to which act?20.RBI is functioning in the country as per which act?Candidate: 00201.What do you mean by a guarantee?02.What are the different types of guarantees?03.What do you mean by letter of credit?04.What do you know by packing credit advance?05.What do you mean by special crossing?06.What do you know by IFSC code ?07.Which is called as mother of deposits?08.Who is a called as natural guardian?09.Whether grandfathers and grandmothers can be natural guardians?10.Which type of credit facility is available to a farmer for raising crops?11.What do you mean by NULM?12.What do you mean by Gram Sadak Yojana?13.What are the salient features of MGNREGA?14.Which authority is supervising the functions of insurance companies?15.What is meant by IPO?16.What is meant by ASBA?17.What is meant by Performance guarantee issued by any commercial bank?18.What do you mean by packing credit facility issued by any commercial bank?19.What do you mean by notice money?20.Treasury bills are issued by which authority and what are the different kinds of treasury bills available in the country?Candidate: 00301.What do you know by PIN number?02.What do you know by PAN number?03.What do you mean by ASBA account?04.What are the functions of DICGC?05.What is the role played by ECGC?06.Mention the Regional Rural Banks which are functioning in Tamilnadu?07.What do you mean by Mergers and what are the different kinds of mergers?08.What do you mean by horizontal merger and reverse merger?09.Which are the top two private sector banks in our country?10.Whether housing loan is a priority sector advance and if so, upto what amount?11.Whether educational loan is a priority sector advance?12.What do you mean by micro small and medium enterprises?13.What do you mean by KYC and name any two important documents which are obtained as per KYC?14.What is the present repo rate and reverse repo rate?15.In the case of MICR code, the middle three digits represent what?16.PAN number consists of how many alpha characters?17.What do you know by biometric automated teller machines?18.What is the criteria by which a bank is considered as largest bank?19.What do you mean by commercial paper?20.What do you mean by FCNR?Candidate: 00401.What do you mean by money laundering?02.What do you mean by subprime lending?03.What is meant by LPG and who is responsible for introduction of LPG strategy in our country?04.What do you mean by PURA?05.What do you know by current ratio?06.At present how many regional rural banks are functioning in our country?07.What do you know by MICR?08.When it comes to rural lending, which are all considered to be priority sector advances?09.Who is called as an authorized dealer?10.When a loan is considered for a cobbler, the loan is granted under which category?11.Name any three security features available in any currency note?12.What is the latest private sector bank in our country?13.What do you mean by small bank and payment bank?14.What are the differences between NEFT and RTGS?15.Who is deciding the rate of interest for savings deposit accounts?16.Who cannot open savings deposit accounts?17.What is meant by memorandum of association?18.What is known as power of attorney?19.In which currencies FCNR accounts can be opened in our country?20.What are the differences between NRE and FCNR?Candidate: 00501.What do you mean by IPO?02.What do you mean by secondary market in our country?03.What do you mean by fund based limits and non fund based limits?04.What do you mean by off balance sheet items?05.What are the advantages and disadvantages of CASA?06.What are the benefits available for any bank by means of CASA?07.What do you mean overdraft facility granted by a bank?08.What do you mean by collateral security?09.In regard to educating a customer, what are the different kinds of information boards displayed in a bank branch?10.Who is the present RBI Governor?11.What do you mean by unclaimed deposits?12.How many regional centres are available for RBI in the country?13.From which date present RBI Governor is functioning and from whom he took charge as RBI Governor?14.What are the advantages of CTS?15.Certificate of deposit is issued by whom?16.RBI is called by which names – mention four names?17.What are the traditional functions of RBI?18.Who is banking ombudsman and by whom he is appointed?19.What is the time limit available for sending a complaint to banking ombudsman?20.Where is the headquarters of State Bank of India?Candidate: 00601.Why commercial banks are more particular about demand deposits?02.What do you mean by CRR?03.Where do commercial banks keep the excess cash?04.What is the function of any currency chest?05.Which are called as financial intermediaries?06.What do you know by FEMA?07.What do you mean by tag line for any bank and why banks are particular about taglines?08.Who is the first Governor of RBI?09.Who was the first Governor of RBI represented by an Indian National?10.What do you mean by PAN and who issues a PAN card?11.What do you mean by POS?12.What is the shareholding pattern by Government of India, State Government and Sponsor bank in the case of RRBs?13.What do you mean by greenshoe option?14.What is meant by doubtful assets?15.What is meant by prime security?16.New Bank of India merged with which bank in the country?17.Who has presented the theory regarding PURA?18.In the case of MGNREGA, how many days’ work has to be allotted as at present?19.What is the rate of interest charged in the case of DRI loans?20.Commercial banks have to lend how much percentage of loans under priority sector category?Candidate: 00701.What do you mean by capital market?02.Which kinds of securities are available through capital market?03.Which is the biggest stock exchange in our country?04.What do you mean by SENSEX?05.What do you mean by market capitalization?06.Tell the name of the private sector bank which was opened during this year?07.What do you mean by LIBOR?08.What do you mean by Pay in slip?09.What do you mean by withdrawal slip?10.Can you tell the name of football legend who visited India recently?11.Who is the present world chess champion?12.What do mean by nomination facility available in the banks?13.Whether nomination facility available is for loan accounts?14.What do you mean by CTS?15.What is the difference between a commercial bank and a development bank?16.What do you mean by letter of credit issued by banks?17.What do you mean by usance bill?18.A customer who has availed overdraft facility from the bank is found to utilize the amount for acquiring long term assets and what do you mean by it?19.What are the different types of loan facilities available from a commercial bank?20.What do you know by atal pension yojana?Candidate: 00801.What do you mean by garnishee order ?02.What do you mean by ITA order and on whom such order is issued?03.Under what circumstances, a bank need not honour garnishee order and ITA order?04.What are the different kinds of services available through automated teller machines?05.What is the safety measure available in automated teller machine?06.What is the maximum number of operations that are permitted for automated teller machines?07.What are the different kinds of electronic funds transfer facilities available in commercial bank nowadays?08.In the case of a cheque who is called as payee?09.What do you mean by open cheque and crossed cheque?10.What do you mean by EEFC account?11.What is known as POS?12.What do you mean by factoring?13.What do you mean by PAN number and TAN number?14.What do you mean by red label automated teller machine?15.What are the different kinds of guarantees available from a bank?16.What is meant by off balance sheet items?17.What is known by current ratio?18.Whether a deposit can be opened in the name of a blind person and what is the procedure?19.What is meant by bill of lading?20.Name any two instruments are considered as semi negotiable instruments?Candidate: 00901.Who can open Non resident external account?02.What do you know by Non resident ordinary account?03.What are the advantages and disadvantages in opening Non Resident Ordinary account?04.What are the different kinds of deposits which can be opened by a Non resident Indian?05.What is the maximum insurance claim settled by DICGC in the case of deposit accounts in case of insolvency of a bank?06.What do you mean by arbitrage?07.What do you mean by arbitrator?08.What is known as MSF?09.What is the difference between bank rate, MSF and Repo rate?10.What are the different kinds of tools employed by RBI in order to control liquidity adjustment facility in our country?11.What do you know by pay in slip and withdrawal slip which are used in banks?12.Who is known as proprietor?13.What do you mean by RKBY scheme?14.What do you know by SJSRY scheme?15.What do you mean by base rate?16.Who is an executor and who is an administrator?17.What do you mean by financial inclusion?18.When interest paid in savings deposit account is taxable?19.What is the minimum and maximum period for which one FCNR deposit is opened?20.Who can open EEFC account?Candidate: 01001.What do you know by conversion?02.What is called as material alteration?03.What do you know by CSR?04.Name any three negotiable instruments which are widely used in banks?05.What is NIFTY and on which basis, it is calculated?06.What do you know by above par, at par and below par?07.What are the loan facilities available for a transport operator?08.What do you know by SLR and what is the present SLR?09.What is the capital requirement in case of newly opened private sector bank?10.What do you mean by intangible asset?11.How many members are there in RBI board?12.RBI board consists of how many Governors, deputy governors and directors?13.Whether a minor can open an account with a commercial bank?14.What is the minimum age limit for a minor for opening a bank account?15.What is known by partnership firm?16.What are the different kinds of crop loans provided to farmers in the country?17.What do you mean by merchant banking?18.What do you know by debt recovery agent?19.What is Lok adalat?20.What do you know by break even point?Candidate: 01101.What is meant by round revolution?02.What is meant by pink revolution?03.What do you know by deferred payment guarantee?04.Name the different kinds of risks faced by any commercial bank ?05.Who is called as an arbitrator?06.What do you know by banking ombudsman?07.What is meant by black money?08.What do you mean by money laundering?09.What is the purpose of special crossing?10.When there is a claim by legal heirs and nominee in regard to a particular deposit when the depositor dies, to whom the bank has to pay the amount ?11.In the case of payment of deposit money to the nominee, who can prohibit the bank in settling such claims?12.What do you mean by BSBDA account and what is the present name for BSBDA account?13.What do you know by Jeevan Jyothi Bima Yojana?14.Vehicle insurance facilities are provided by which public sector insurance companies in our country?15.What do you mean by horticulture?16.What is meant by mortgage and hypothecation?17.For which kinds of banking services nomination facility is available?18.What are the different kinds of capital?19.What do you know by articles of association?20.The certificate of incorporation and certificate of commencement of business are registered with whom?Candidate: 01201.What do you mean by call money, notice money and term money?02.What is meant by layer farming?03.What is known as sericulture?04.What do you know by SHG?05.What do you know by micro credit?06.What do you know by DIR scheme?07.What do you mean by FIR?08.What is known as CAMELS?09.What do you mean by tier I capital as per BASEL-II accord?10.What do you mean by bills discounting facility provided by any bank?11.What are the differences between overdraft facility and term loan facility provided by banks to their customers?12.Who is the topmost authority in any bank?13.The topmost authority in any bank is appointed by whom?14.What do you know by JAIIB and CAIIB?15.What is the term meant for honeybee rearing?16.What do you know by SARFAESI act?17.How many banks were nationalized during the first stage?18.What do you mean by a public sector bank?19.What do you mean by a nationalized bank?20.What is the different between nationalized bank and public sector bank?Part: 003A mock interview(This is one imaginary interview session conducted with Mr. Ashwin for the purpose of guiding the candidates)Mr. Ashwin is an engineering graduate and he had completed his graduation from an engineering college situated at Chennai. Even though he wanted to get an employment in prominent companies, he could not get the job and on getting the information that banks are providing employment opportunities on large scale to all graduates in the country, he applied for IBPS officers’ examination and came out successful in the common written examination.He was informed about the interview process in the regional office of one prominent bank in Chennai and in order to avoid any tension and nervousness he came to the interview hall half an hour earlier to his scheduled timing.He started reading the day’s news paper and started relaxing himself so that he can answer the questions posed by the committee members calmly and confidently.Now he is called by the attending staff to enter into the interview room.Mr. Ashwin neatly dressed in white shirt with full sleeves wearing a dark colored pant walks inside the cabin after closing the door gently.-May I come in Sir?-Yes – Please come in and be seated.-Thank you sirsMr. Ashwin sits on the chair provided to him and looks at the members for their questions-Mr. Ashwin, which place do you belong?-Sir, I am from Chennai-What about your father?-My father is working as an accountant in a private firm.-How many members are there in your family?-Myself, my elder sister since married; my younger sister studying in a College; my younger brother working in a private firm and my father and my mother-I find that you are an engineering graduate and why you are willing to join in a bank?-I find that career growth is found to be better in banks nowadays. Apart from the above, I can serve people more while working in a bank.-(The details namely; better salary, job security, comfortable working hours etc., are to be kept in mind and under no circumstances to be disclosed to the interview committee)-Can you tell me about Chennai?-Chennai is one among the four metropolitan cities of our country. It is fast growing. Chennai is famous for automobile production and health care. There are many reputed hospitals and a large number of automobile manufacturers in the city. Apart from the above in the case of information technology, Chennai ranks number two next to Bangalore and there is a lot of scope for people who are willing to work in IT industries. The population is around 70 lakhs and by areawise, Chennai is the largest among all cities in the country. Marina beach is world’s second largest beach.-Can you tell me about Repo rate?-Commercial banks can borrow funds from RBI against government securities at Repo rate and there is an implied condition that the banks will repurchase the government securities after clearing the loans. The present repo rate is 6.25%-What is the difference between bank rate and repo rate?-When the commercial banks borrow funds from RBI against discounting bills they have to pay interest at bank rate and presently the bank rate is 7.25%. Normally Repo loans are given towards meeting short term requirements and loans at bank rate are provided towards meeting long term requirements-What do you mean by non resident Indian?-Non Resident Indian is Indian national who has gone abroad for the purpose of business, studies or employment and stayed there for more than 182 days-What do you mean by Persons of Indian Origin?-Persons of Indian Origin are people whose forefathers are/were non resident Indians at any point of time. In other words PIOs are the sons/daughters/grandsons/granddaughters of Non resident Indians who had already settled in the foreign countries and PIOs are the citizens of those countries and not of India.-What do you mean by CBS?-CBS means Core Banking Solutions. Nowadays, the entire banking functions are carried out through computers in banks and branches of all banks are connected through common network and transactions can be done from one branch of one bank with another branch of another bank comfortably using internet banking or mobile banking.-What do you mean by Moratorium?-It is the repayment holiday permitted for repayment in the case of term loans. Normally organizations generate income after some period from the date of installation of the machineries and other inventories and they may not be able to generate sufficient income towards payment of instalments due to the bank and in this connection banks permit some cushion time called as repayment holiday or moratorium. The repayment holiday may be for three months, six months or nine months depending upon the nature and size of the industry. On completion of the moratorium period, the organizations start repaying the loans.-What do you mean by EMI?-EMI means equated monthly instalments. It consists of repayment of both principal and interest payable either at monthly or quarterly intervals. Normally EMI is permitted in the case of loans like housing loans, personal loans, white goods loans etc., where the borrowers have regular income like salaries or any other remuneration.-OK Ashwin, I find that you are highly qualified having M.E. in civil engineering and MBA. Whether you will continue in the bank?-Definitely sir. I am informed that a person who joins as a clerk or an officer in any bank can get promotion upto General Manager level by the time he retires from his services and I hope that I can utilize the knowledge acquired by me while discharging my duties in the bank and I shall definitely aspire for promotions in case if I am selected in the bank.-OK. Ashwin – thank you:-Thank you sirs for your nice company.Ashwin gets up from his chair gently, moves towards the door, opens the door slowly and after getting out of the room closes the door gently.(The interview with Mr. Ashwin is treated as completed.)

Some times I often wonder the same thing, since some of the lines of Credit I have seen issues are totally out of the financial capability of the person(s) they are lending to. Indeed one of their arguments that (particularly for store cards) why the interest rates are so high.Indeed the likes of Store Cards are very high risk lending so an APR of 39.9% may be justified when compared with the loss. Eqaully if you are that worried by the applicants ability to pay, then you should not underwrite the account in the first place!However the “sensible” card issuers, usually use the information that you filled in on the application form for the line of Credit for the Card to determine the line of Credit, or indeed reject the application.Factors include:Your age and sex (it was accepted at one stage that women were more frugal than men, however over time this has changed). The sex element is not allowed any more in the application due to UK Discrimination laws, although you are still required to show your marital status. That is more to do with statistical analysis. Young men under the age of 25 are seen as a higher irsk to default than girls in the same age time-frame. The details of your bank and the date you opened the account. This is for two reasonsa) To take a bank refernce, i.e. ask your bank whether they feel that you are able to sustain a loan for a value of £/US XXXXX with an instalment of £/US XXX for (say) 36 months.b) To ensure that the banking details are correct and you are not trying to impersonate or take money out of another person’s account, which you have no legal relationship.2. You live where you state you do (that may include a copy of a Utility bill and or bank statement addressed to you (in name).3. At least three Pay slips to or Statements of Pay or what we refer to in the UK as a p.60 which is issued on the 5th of April each year which shows your gross income, tax and National Insurance paid, and in the case of your employer the amount of National Insurance they have paid. It will also confirm your full name and address, as well as you National Insurance number which is a unique number with to letters, followed by 6 numbers and then finally a letter: e.g. AB 12 45 78 C (how the computer generates the number I have never understood).This actually provides a lot of verification information for the Underwriter /Risk Assessor since it pretty much confirms who you are, and the genuine income you have received in the last 12 months.If you are applying during the course of the year and not at the last year end or the immediate new year, the three recent pay-slips/advices show the amont earned for the last three months both gross and net, and again in the UK each pay-advice has to show a running total of pay to-date, as well as Tax. This willl allow the Assessor/Underwriter of the loan an indication of your income.4. The application form may ask if you own or rent your property or it is tied to your job. This will give the Underwriter /Assessor an indication of the security in terms of movement. People who own/have a mortgage on their property are less likely to “skip” than a person who is living in rented accommodatioj/tied property or single person living alone. At one stage many Credit Providers required that you disclose the number of children you had in the family, but it was a Court Directive to the lenders that this was now an intrusion on privacy too far. Ironically though it it a good guide to the ability for the applicant to pay : to put it bluntly children are expensive; at the other extreme though becuase they go to school particularly it is not as easy to walk away from the home as you have to take the child out of school.You would then have to notify the Education Authority where you were going to have you child schooled. Although that is Private and Confidential between you and the Council/Authority in the case of a fraudulent transaction or deliberate default to evade the debt,the dislcosure of that information can be ordered by a Court, whether civil or criminal.Once all these factors (of course most importanly confirmed income and financial status- confirmed by an enquiry on your bank and the p.60) are taken in to consideration, the underwriter can then see your ability to pay, the “disposable income” i.e. after the payment of lease/mortgage, outgoings as utilities and other statutory payments. That would of course include any Court Orders held against you.Having worked out your disposable income for each month, that will give a rought installment per month and that is linked directly to the interest rate that the card will charge of the “revoloving loan” (as we refer to it) and how much per annum that would service less the interest. So that could be as high as US$ 15000 (GB£10000)Of course different card issuers have different methods of computing the Credit Limit and you conceived ability to pay. Not all lender use the same criteria.In the case of Companies a similar priciple applies but actually much easier, particularly with Limited (incorporated) Companies since certainly in the UK a Compnay is required to file at Companies House (a large operation which carries all the information about all the Limited Companies (incluiding Public Limited Companies).That will include what is know as a “Company’s Annual Return”, which is basically and annual confirmation of the Company’s Registered Office which may not be where the company trades from but where all formal documents, including legal ones are legally deemed to be served if sent or handed in to that address.In the company return it will required for the Company Secretary (not a typist in the legal sense) to register and confirm their name and address, along with the Directors whith shareholdings in the company and the value of that holding. That can be ratified with the Balance Sheet.The Balance Sheet is an indepth outline of the companies fincances, including the amount of shares as “Cash at bank”, the amount due from other people (debtors to the company) and if the company sells goods, the amount of stock and its value for the purposes of the balance sheet (this is always “iffy” particularly clothing stores were fashions change and the stock value reduces, or in other situation where the value of the stock can rise and fal in accordance with the products being sold.That becomes your “Current Assets”. Deduct the monies due to other parties (person you own money to (purchase ledger), and that will give you the true current asset position of the company; an approximation how fast the company could pay its debts.However that does come with a bit of a twist since as above the stock may be out of date or not accurately assessed as to value and the Debtors (i.e. people who owe the company for goods and services supplied) have not paid as yet (Sales Ledger) but still due to the company. Now some of these debtors may be unstable and could be on the verge of going to Court in which case they could be unreliable and the Debtors figure overstated as actually part of that value may be in Court, subject to dispute etc.When you deduct the current debt, against the current debts, that gives you a net value of the company and its ability to pay. If the company has other assets as machinery and plant etc which have a value these are stated separetely as “Fixed Assets” and they may include property [buildings] owned by the company.Once you factor those in to the current assets, less the monied due to other persons (including the bank and fixed loans) gives the person reviewingthe accounts a “net worth” of the company.There is another piece of information called the Profit and Loss account which is actually does what is states:The turn over the company less the costs (including payroll) of runing the company as well as the costs of rented items as property on rent etc.One of the advantages of knowing the turnover of the company is that with the details of the debtors (money due from customers to the company through sales made but not paid for) . If you divide that figure by 365 (days in a year) that will give you the average amount (value) of sales made per day.If you divide the debtots figure quoted in the balances shee that will give you a figure of say 107. In short that shows the average amount of time it takes their debtors to pay them. Of course that gives a direct reflection on their Credit Control Department’s efficency in collecting money due and in directly gives a clue to whether the company has issue with disputes which have yet to be resolved, indeed may even be written off.From there you can assess how viable the company is in terms of granting a line of Credit. This is where the Credit Manager/ Risk Assessor’s job can become a bit of a juggle as you are judging the potential risk of loss to the company, should the applicant for the company default of indeed fail completely i.e. Liquidation (Chapter 11 in America).So the processes of agreeing a line of Credit whether it be commercial or “retail credit”, i.e individuals, not coporations and busiesses are pretty similar, whether it be a line of Credit as a Credit Card or operating overdraft in the case of an individual.It is not an exact science as you have probably gathered and the assessment processes may vary from company to company but follow pretty much the same lines. These can be backed up by written refernces from Creditors and the Customers bank as to the reliability of the company is to pay and in the case of a Bank Reference the stability of the company.References, whether they be bank or trade cannot be relied on too much as in the case of banks they are pretty broad in the way they are worded, e.g : “client has been registered with the branch for X years, properly consituted Limited Company (which you already know) and considered good and trustwothy and suitable for your purposes”. (That is to say the value of Credit you are going to set for the customer)There may be slight variations indicating for example “…the bank feels their finances and income are fully committed”. That is pretty much a warning that you may have problems in recovering as the subject company is indeed in trading difficulties.With all this information you can make and informed decision whether to extend the trading terms or make modifications as to the line of Credit you will actually provide -v- what your client wants. You may want to put special terms in place such as a deposit (by percentage of order perhaps) and the balance in 30 days “net” of invoice date, i,.e. the date the invoice being the 1st of the month, then the payment should be expected on the 1st of the following month. As we all know, that is rarely the case-:) .It can be a bit “hit & miss” but of course the more information you have the better the decision you can make.Sorry this is a long reply but it does give an indication as to the decisions a person providing the line of Credit to a third party and the level (line) of that credit as a limit.Chris R- London