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Selected Interview QuestionsCandidate: 00101.Why you are willing to join in a bank?I am willing to join in a bank since I hope that I may be having more opportunities to serve the public. Banks have better career opportunities by means of periodical promotions to higher cadre.02.What do you mean by appraisal of gold loans?Gold loans are granted against the security of gold jewellery namely gold chains, necklaces etc., The jewellery apart from gold contains certain amount of copper and stones. Appraiser is a person well versed in the art of appraising the jewellery and on appraisal of the jewellery, he will be finding out the approximate gold content so that the bank may be able to provide loans against the gold content.03.What are the different kinds of term deposits available in a commercial bank?The different kinds of term deposits available in a commercial bank are – fixed deposit, recurring deposit and reinvestment deposit. In the case of fixed deposit, a fixed amount is accepted for a definite period and interest is paid on quarterly basis. In the case of reinvestment deposit which is similar to fixed deposit, interest is paid on maturity since interest is reinvested. In the case of recurring deposit, monthly instalments are accepted for a fixed period.04.What is the minimum period for which a fixed deposit is accepted and the maximum period for which a fixed deposit is accepted?The minimum period for which fixed deposit is accepted is seven days and the maximum period is ten years.05.Whether a fixed deposit can be accepted for a period more than ten years?In the case of deposits in the names of minors on account of settlement of claims, the deposit can be for more than ten years06.What do you mean by FERA?FERA means foreign exchange regulations act and it came into effect from the year 1973. An act to regulate certain payments dealing in foreign exchange, securities, the import & export of currency and acquisition of immovable property by foreigners. Under Section 31 (1) of the Foreign Exchange Regulation Act ( FERA) of 1973, it is mandatory for foreign corporations, which are not incorporated in India to obtain permission from the Reserve Bank Of India (RBI) to acquire, hold, transfer or dispose off in any manner (expect by way of lease for a period not exceeding five years) any immovable property in India.07.What do you mean by ECS?ECS means electronic clearing service and the customer can authorize on periodical basis to make payment of certain utility bills like electricity charges, water charges etc., by debiting his account till such time he submits a revocation letter. Similarly, he can authorize corporate to credit the dividends on shares and interest on debentures as and when due to the credit of his account with the bank.08.What is the minimum amount that can be sent through RTGS?The minimum amount that can be sent through RTGS is Rupees two lakhs and there is no maximum limit09.What is the maximum amount that can be remitted through NEFT?There is no or maximum limit for remittances sent through NEFT10.What is the maximum amount that can be sent abroad by any resident individual?Under liberalized remittance scheme, all resident individuals including minors are allowed to freely remit an amount upto US dollars 250000 (or its equivalent freely convertible foreign currency) per financial year11..What is the name of apex bank which is responsible for the development of agriculture in the country?NABARD is the 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?National old age pension scheme; Jawahar Gramin Samruddi Yojana; National Family Benefit scheme; Mahatma Gandhi National Rural Employment Guarantee Scheme; National Maternal Benefit Schemel Annapurna etc.,13.What do you mean by crossing of any cheque?Writing of two parallel transverse lines drawn on the face of the cheque on top left hand corner with or without any words between the lines is known as crossing and it is for the purpose of making payment of the cheque through an account in the name of the payee or holder.14.What are the different kinds of crossing?Two parallel transverse lines drawn on the face of the cheque on top left hand corner of the cheque with any words or without any words is known as general crossing and the the payment can be made to the account of the payee or holder with any bank. In case the name of any bank is mentioned within the two parallel lines, it is known as special crossing and in this case, the payment should be made to the account of the payee or holder with the bank mentioned in the crossing only and not to any other bank.15.What do you mean by CASA?CASA means current and savings and this is applicable to computerized branches linked under core banking solution16.Whose signature is available in Rs. 100/- currency note?The signature of RBI governor is available in Rs. 100 currency note17.What do you know by dividend?Dividend is the return available in the form of money for the investments made by the shareholders in the equity shares and preference shares of any company.18.Bank holidays are declared according to which act?Holidays for banks are declared according to Negotiable Instruments act 1881 by the respective state governments in their states. However, all Sundays, all second and fourth Saturdays have been declared as holidays apart from the holidays permitted for religious and national ceremonies.19.Banks are functioning according to which act?Commercial banks in the country are functioning according to Banking Regulation act 1949 and to some extent as per Reserve Bank of India act 193420.RBI is functioning in the country as per which act?Reserve Bank of India is functioning according to Reserve Bank of India act 1934.Candidate: 00201.What do you mean by a guarantee?Guarantee is an undertaking executed by one person called as guarantor in favour of another person called as beneficiary expressing his intention to make payment in the event of failure of the principal debtor on payment of a debt or failure to perform any contract within the stipulated time or according to the terms of the contract.02.What are the different types of guarantees?The different types of guarantees are financial guarantee, performance guarantee and deferred payment guarantee03.What do you mean by letter of credit?Letter of credit is an undertaking executed by one banker on behalf of its customer to honour bills and documents drawn by another person as per the terms and conditions as mentioned in the letter of credit04.What do you know by packing credit advance?It is the preshipment advance granted by one bank to the exporter for the purpose of procuring raw materials; payment of various duties like customs duty, excise duty; packing charges; shipment charges etc.,05.What do you mean by special crossing?In case the name of any bank is mentioned within the two parallel lines, it is known as special crossing and in this case, the payment should be made to the account of the payee or holder with the bank mentioned in the crossing only and not to any other bank.06.What do you know by IFSC code ?IFSC means Indian Financial System Code and this is one alphanumeric code consisting of eleven digits of which the four alphabetic digits represent the name of the bank mentioned in abridged form and the next zero is known as control number and the last six numeric digits represent the branch code of the bank.07.Which is called as mother of deposits?Savings deposit is known as mother of deposits. Normally the first time customers will be advised to open savings deposits with the bank branch before availing any other facility with the bank08.Who is a called as natural guardian?Bother mother and father are known as natural guardian for the purpose of opening accounts in the name of minors represented by the guardian.09.Whether grandfathers and grandmothers can be natural guardians?Grand fathers, grandmothers grand grandfathers or grand grandmothers cannot represent as natural guardians on be behalf of the minors10.Which type of credit facility is available to a farmer for raising crops?For raising crops, the farmers are provided with crop loans, Kisan Credit Cards etc.,11.What do you mean by NULM?National Urban Livelihoods Mission (NULM) was launched by the Ministry of Housing and Urban Poverty Alleviation (MHUPA), Government of India in 24th September, 2013 by replacing the existing Swarna Jayanti Shahari Rozgar Yojana (SJSRY).The NULM will focus on organizing urban poor in their strong grassroots level institutions, creating opportunities for skill development leading to market-based employment and helping them to set up self-employment venture by ensuring easy access to credit. The Mission is aimed at providing shelter equipped with essential services to the urban homeless in a phased manner. In addition, the Mission would also address livelihood concerns of the urban street vendors12.What do you mean by Gram Sadak Yojana?The Pradhan Mantri Gram Sadak Yojana called as PMGSY was launched by the Government of India for the purpose of providing connectivity to unconnected habitations as part of a poverty reduction strategy. Government of India is endeavouring to set high and uniform technical and management standards and facilitating policy development and planning at state level in order to ensure sustainable management of the rural roads network.13.What are the salient features of MGNREGA?MGNREGA is known as Mahatma Gandhi National Rural Employment Guarantee act and according to this employment is guaranteed at least one person per household in rural areas. It aims at enhancing the livelihood security of people living in rural areas by guaranteeing hundred days of wage employment during each financial year to a rural household whose adult members volunteers to undertake unskilled manual work14.Which authority is supervising the functions of insurance companies?IRDA – Insurance Regulatory and Development Authority is the authority responsible for supervising the functions of insurance companies in our country15.What is meant by IPO?IPO means initial public offer and this is the first time public offer of equity shares, preference shares or debentures to the public for subscription16.What is meant by ASBA?ASBA means applications supported by blocked amount. Nowadays investors are permitted to remit the amount through ASBA demand drafts drawn in ASBA accounts for the purpose of subscribing shares or debentures through initial public offer and further public offer. When the demand draft is issued, instead of debiting the amount in the account, the amount is blocked till such time the shares or debentures are allotted. On allotment, the entire amount is debited; in the case of partial allotment, the amount is debited equivalent to the value of allotment and in the case of non allotment, the entire amount is allowed for further use. For the intervening period, the depositor earns interest as applicable to the category of deposits.17.What is meant by Performance guarantee issued by any commercial bank?In the case of contracts in favour of governments, the contractors are in a position to provide a bank guarantee by a reputed commercial bank, thereby undertaking to guarantee the government department to compensate the loss on account of failure of performance of the contract by the contractor within the due date or failure to perform the contract as per the terms and conditions of the contract. This is known as performance guarantee.18.What do you mean by packing credit facility issued by any commercial bank?Packing guarantee is known as preshipment advance provided by the commercial bank to the exporter for the purpose of procuring raw materials, packing materials or making payment towards customers duty, excise duty, transportation charges etc.,19.What do you mean by notice money?Notice money is money borrowed for a period of two days and more and upto fourteen days in the call money market.20.Treasury bills are issued by which authority and what are the different kinds of treasury bills available in the country?Treasury bills are issued by central government and state governments for the purpose of mobilizing funds from the public and others towards meeting the cost of various projects. There are three kinds of treasury bills as at present namely – 91 days, 182 days and 364 days. 91 days treasury bills are issued each Friday and the notified amount is Rupees one hundred crores. 182 day treasury bills are issued during alternative Wednesdays which is non reporting week and the notified amount is Rupees 100 crores and 364 days treasury bills are issued on alterntive Wednesdays which is a reporting week and the notified amount is Rupees 500 crores.Candidate: 00301.What do you know by PIN number?PIN number is four digit number expressed in numerical characters. PIN number is used for the transactions done using debit cards and credit cards through automated teller machines and point of sale terminals.02.What do you know by PAN number?PAN number is known as permanent account number. This is used for the purpose of remittance of income tax with income tax department. Tax payers should get one PAN number by sending an application along with relevant documents and by payment of specified sum of money to Income tax department or their agencies. It is ten digit number consisting and alphapetical and numerical characters.03.What are the functions of DICGC?DICGC means Deposit Insurance and Credit Guarantee Corporation and this corporation provides deposit insurance upto an amount of Rupees one lakh per depositor per bank in the event of insolvency of the bank and it also provides small loans guarantee upto certain limits04.What is the role played by ECGC?ECGC provides guarantee support to the exporters of the country in the form of several export guarantees05.Mention the Regional Rural Banks which are functioning in Tamilnadu?The Regional rural banks which are functioning in Tamilnadu are Pandiyan Grama Bank and Pallavan Gramin Bank. Pandiyan Grama Bank has been sponsored by Indian Overseas Bank and pallavan Gramin Bank has been sponsored by Indian bank.06.What do you mean by Mergers and what are the different kinds of mergers?When two independent units merge together to form a single unit, it is known as merger. The mergers can be vertical merger, horizontal merger, reverse merger, consolidation, amalgamation etc.,07.What do you mean by horizontal merger and reverse merger?When the business functions of two units are identical in nature and when the merger takes place between those units, it is known as horizontal merger. New Bank of India merged with Punjab National Bank and both are banking organizations. Industrial Credit and Investment Corporation of India Limited was instrumental in establishing ICICI bank as per LPG norms and subsequently Industrial Credit and Investment Corporation Limited merged with ICICI Bank and when a parent unit gets merged with an ancillary unit, it is known as reverse merger.08.Which are the top two private sector banks in our country?The top private sector banks in our country are HDFC bank limited and ICICI bank limited09.Whether housing loan is a priority sector advance and if so, upto what amount?Housing loans granted are treated as priority sector advances subject to certain conditions. Loans to individuals up to Rupees 28 lakh in metropolitan centres (with population of ten lakh and above) and loans up to Rupees 20 lakh in other centres for purchase/construction of a dwelling unit per family, are eligible to be considered as priority sector provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rupees 35 lakh and Rupees 25 lakh, respectively. Housing loans to banks’ own employees are not eligible for classification under priority sector.10.Whether educational loan is a priority sector advance?Loans to individuals for educational purposes including vocational courses upto Rupees 10 lakh irrespective of the sanctioned amount are eligible for classification under priority sector.11.What do you mean by micro, small and medium enterprises?The classification is based on original investment in plant and machinery: For micro enterprises, upto Rs. 25 lakhs for manufacturing units and Rupees 10 lakhs for service units; For small enterprises, for manufacturing units above Rupees 25 lakhs and upto Rs. 5 crores and for service units above Rupees 10 lakhs and upto Rupees 2 crores; For medium enterprises, for manufacturing units above Rupees 5 crores and upto 10 crores and for service units above Rupees 2 crores and upto Rupees five crores12.What do you mean by KYC and name any two important documents which are obtained as per KYC?KYC means know your customer guidelines and these guidelines were prescribed by RBI for new customers who are willing to open accounts with commercial banks and according to KYC, any new customer who is willing to open accounts with commercial banks should submit the photocopy of anyone of the following namely; driving licence, voter id card, AADHAARA card, passport as address proof and photocopy of anyone of the following namely; driving licence, voter id card, AADHAAR card, passport, pancard as identity proof. KYC is antimony laundering device.13.What is the present repo rate and reverse repo rate?The present repo rate is 6.25% and reverse repo rate is 5.75%14.In the case of MICR code, the middle three digits represent what?MICR code consists of nine numerical digits and the middle three numerical digits represent bank name15.PAN number consists of how many alpha characters?PAN number consists of ten digits. The first three alpha characters are random alphapetical characters between AAA to ZZZ; next one alpha character represents the category of the cardholder; the next one alpha character represents the first character of the name of the cardholder; the next four numerical digits are auto generated sequential numbers and the last one single alpha character is a check digit.16.What do you know by biometric automated teller machines?In the case of automated teller machines, the four digit numerical PIN number is used for performing transactions using debit card and credit card. In the case of biometric automated teller machines, instead of PIN numbers, anyone of the following body parts is used – left hand thumb impression; eye retina and voice recognition. In India, the left hand thumb impression is the accepted mode and these kinds of automated teller machines are known as green label automated teller machines.17.What is the criteria by which a bank is considered as largest bank?For the purpose of ranking, a bank is considered to be largest or smallest taking into consideration the business position of the bank; namely – the total deposits and total advances as at the end of March each year.18.What do you mean by commercial paper?Commercial papers are issued by well rated organizations for mobilizing funds from the public and other corporate. They are issued at a discount and they are freely negotiable by endorsement and delivery. The minimum maturity period is seven days and the corporate should have earned credit rating equivalent to P2 issued by CRISIL19.What do you mean by FCNR?FCNR means foreign currency non resident accounts. Non resident Indians and Persons of Indian origin are eligible to invest in this deposit. It is a term deposit accepted in the currencies – US dollar, Sterling Pound, Euro, Japanese Yen, Canadian dollar and Australian dollar. The minimum period of deposit is one year and the maximum period is five years and the deposit is held in foreign currencies and the interest earned is free from income tax.20.What do you mean by Escheat?He is a person who dies without leaving any legal heirs and in this case, his estate will revert to the state government.Candidate: 00401.What do you mean by money laundering?Using the banking channel for the purpose of bringing illegal money is known as money laundering.02.What do you mean by subprime lending?Mass lending by commercial banks to the borrowers without ascertaining the credit worthiness of the borrowers03.What is meant by LPG and who is responsible for introduction of LPG strategy in our country?LPG means liberalization, privatization and globalization and this was coined by Dr. Manmohan Singh, the then finance minister of our country. The salient highlights of the Liberalisation, Privatisation and Globalisation Policy in India are: Foreign Technology Agreements; Foreign Investment; MRTP Act, 1969 (Amended); Industrial Licensing; Deregulation Beginning of privatization; Opportunities for overseas trade; Steps to regulate inflation; Tax reforms; Abolition of License -Permit Raj04.What do you mean by PURA?PURA means providing urban amenities in rural areas. This concept was coined by Dr. A.P.J. Abdul Kalam, the then president of India.05.What do you know by current ratio?It is one equation between current assets and current liabilities. This ratio provides the liquidity position of the organization. When the ratio is more than one it is known as positive current ratio and the unit is having sufficient working capital and when it is less than one, the unit is found to have more current liabilities than current assets and the liquidity position is found to be very weak.06.What do you know about negotiable instruments act?In India, the negotiable instruments act was passed during 1881 which came into force with effect from March 01, 1882. Negotiable instruments means and include promissory note, bills of exchange and cheque payable to order or bearer. Promissory note, bill of exchange, cheque and demand draft are negotiable instruments.07.What do you know by MICR?MICR means magnetic ink character recognition. MICR code is available in MICR bank at the bottom of the cheque or demand draft. It consists of nine numerical digits of which the first three digits represent the centre/city; the middle three digits represent the bank and the last three digits represent the branch of the bank.08.When it comes to rural lending, which are all considered to be priority sector advances?When it comes to rural lending, the loans granted to the following are considered to be priority sector advances – Loans granted to all agriculture related activities; self help group; Differential rate of interest; Loans to SC/ST beneficiaries; Loans provided to doctors for setting up clinics in rural areas; Loans to dealers in fertilizers and pesticides; loans to dealers of springler irrigation and drip irrigation equipments etc.,09.Who is called as an authorized dealer?Authorised dealer is at present known as authorized person. Authorised person is an individual or organization permitted to deal in foreign exchange business in the country.10.What do you know by financial inclusion?Financial inclusion means the following: Providing formal banking services to poor people in urban and rural areas; Promoting the habit of money savings, insurance, pension-investment among poor people; Helping the people in getting loans at reasonable rates from commercial banks so that they do not become victims to local moneylenders11.What are the important initiatives taken through financial inclusion in the country?The following are the important initiatives taken through financial inclusion in our country: Lead banking scheme; No frill accounts; Basic savings bank deposit accounts; JANDHAN accounts; business correspondent and business facilitator facilities; Swabhiman campaign;12.What do you mean by MCLR?MCLR replaces the base rate system. RBI introduced the system with effect from 01.04.2016 in order to determine the base rate by commercial to improve the efficiency of monetary policy transmission. All rupee loans sanctioned and credit limits renewed with effect from 01.04.2016 to be priced with reference to MCLR and it will be an internal benchmark for the banks. It consists of marginal cost of funds, negative carry on account of CRR, operating costs and tenor premium. The marginal cost of funds consists of two components namely; marginal cost of borrowings and return on networth13.What are the major money market instruments?Certificate of deposits; Commercial paper; Inter Bank participation certificates; iner bank term money; Treasury bills; Bills rediscounting and call/notice money14.What are the differences between NEFT and RTGS?Both are two categories of online remittance facilities through CBS enabled branches of commercial banks. The minimum balance that can be sent through RTGS is Rupees two lakhs whereas in the case of NEFT, there is no such limit. The beneficiary gets his funds at real time and it means instantaneously without any loss of time. In the case of the beneficiary gets his funds in between batches15.Who is deciding the rate of interest for savings deposit accounts?Rate of interest for savings deposits is decided by respective commercial banks only and RBI has permitted full freedom in this connection.16.Who cannot open savings deposit accounts?Proprietorship concerns, partnership firms, limited liability partnership firms, private limited companies and public limited companies are not permitted to open savings accounts17.What is meant by memorandum of association?Memorandum of association is the parent document for any company whether it is a private limited company or private limited company. It contains the details of formation of the company, policies, objectives, registered office and more.18.What is known as power of attorney?Power of attorney is an authorization given by one person called as principal in favour of another person called as an agent authorizing the agent to perform certain activities on behalf of the principal and it can be specific power of attorney or particular power of attorney.19.In which currencies FCNR accounts can be opened in our country?FCNR account can be opened in the following currencies namely; US dollars, Sterling Pounds; Euro; Japanese Yen; Australian dollars and Canadian dollars.20.What are the differences between NRE and FCNR?NRE and FCNR accounts are opened by non resident Indians and Persons of Indian Origin in India. NRE accounts are to be opened in rupees whereas FCNR is opened in foreign currencies. NRE accounts can be opened in the form of savings account, current account, reinvestment deposit and fixed deposit whereas, FCNR account is permitted to be opened as fixed deposit or reinvestment deposit. NRE term deposits can be opened for a minimum period of seven days and maximum period of ten years. FCNR accounts can be opened for a minimum period of one year and maximum period of five years.Candidate: 00501.What do you mean by masala bonds?Masala bonds are the bonds issued for rupee denominated borrowings by Indian companies in overseas markets02.What do you mean by secondary market in our country?Secondary market pertains to capital market and it is also known as stock exchange or old issues market. Shares, debentures and bonds can be bought and sold from the stock exchange through registered brokers.03.What do you mean by fund based limits and non fund based limits?The loans provided to the borrowers in the form of term loans, overdrafts, cash credits and bills discounting limits are known as fund based limits since funds are released to the borrowers. Guarantees and letter of credits are non fund based limits since no funds are provided for the time being since they are contingent liabilities.04.What do you mean by off balance sheet items?Guarantees, letter of credits and bills sent for collection for which proceeds are yet to be realized are known as off balance sheet items05.What do you mean by closed ended scheme?This is one form of mutual fund scheme. Like initial public offer, the scheme is open for a certain period only and after which the public cannot invest their amount in the units under this scheme.06.What do you mean by open ended scheme?This is one mutual fund scheme and the units under scheme can be purchased and sold at any time07.What do you mean by overdraft facility granted by a bank?Overdraft is a facility granted by the banks towards meeting the working capital requirements of a borrower. This is provided by means of credit limit over and above the current account balance and the borrower has to pay the interest as and when due.08.What do you mean by collateral security?Collateral security is an additional security provided by the borrower in addition to the primary security. For example, in the case of vehicle loan, the car purchased out of loan is known as the prime security and the insurance policy obtained by the bank from the borrower for the sanction of this loan is known as collateral security.09.In regard to educating a customer, what are the different kinds of information boards displayed in a bank branch?The following boards are available in the bank branches – Working hours and business hours; Interest rates on various deposits; Interest rates for loans; Service charges; Time norms for various services; Details of schemes available in the branch10.Who is the present RBI Governor?The present governor of RBI is Shri Urjit Patel and he is functioning as the governor of RBI since 04th September, 201611.What do you mean by unclaimed deposits?The deposits which are not in operation for more than ten years are known as unclaimed deposits. For the purpose of this classification, the customer induced transactions are only taken into account.12.How many regional centres are available for RBI in the country?Reserve Bank of India has four regional centres at the following places – Chennai, Kolkatta, New Delhi and Mumbai.13.What do you mean by white label automated teller machines?The automated teller machines which are maintained and managed by non bank entities are known as white label automated teller machines. In our country TATA Indicash and Muthoot finance are having such machines installed at various centres.14.What are the advantages of CTS?CTS means cheque truncation scheme. This is used for clearing purpose. Normally commercial banks used to send the physical cheques through their15.What do you mean by certificate of deposits?Certificate of deposits are issued by scheduled commercial banks (except Regional Rural Banks) and all financial institutions within their umbrella limits. Individuals, corporate, companies, trusts, funds and associations can invest in certificate of deposits and they are issued for a minimum period of seven days and maximum period of twelve months in the case of commercial banks and in the case of financial institutions the minimum period is one year and maximum three years, Minimum amount for investment is Rupees one lakh and in multiples of Rupees one lakh.16.RBI is called by which names – mention four names?RBI is called by the following names – banker to banker; lender of the last resort; custodian of banks; banker to government;17.What do you mean by ways and means advances?Ways and means advances were introduced as per an agreement between Reserve Bank of India and Government and they are temporary overdraft facilities provided by RBI to central government and state governments and the purpose is to bridge the time interval of mismatch the government expenditure and receipts. The duration of the limit is ten days for central government and 14 days for state government departments.18.Who is banking ombudsman and by whom he is appointed?Banking Ombudsman is an arbitrary authority who resolves the complaints received from the customers of commercial banks in regard to bank related issues.19.What do you mean by EEFC account?Exchange Earner’s Foreign Currency account is an account maintained in an account maintained in foreign currency with an authorized dealer ; i/e/ a bank dealing in foreign exchange. Professionals, exporters, trainers etc., who are in receipt of foreign exchange for the services extended by them in foreign countries can invest the amount in EEFC account and the account will be in the form of current account and no interest is paid for the balance held in EEFC account.20.What do you know by NBFC?NBFC means non banking finance companies. It is a company registered under Indian Companies act 1956 and presently 2013 engaged in the business of providing loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire purchase, insurance business, chit fund business etc.,Candidate: 00601.What do you mean by arbitrage?It is the process of purchase of one security from one market and selling the same security for earning a profit at the same time at another market.02.What do you mean by Bonus shares?It is the free allotment of shares in certain proportion to the existing shares held by the shareholders of a company and this is a means of providing reward to the investors for their contribution to the growth of the organization by capital investment03.What do you mean by Bull?It is a term given to a speculator on stock exchange who buys the securities in expectation of a rise in the prices. The market is called as bullish when there is a domination of buyers over the sellers04.What is known as dematerialization?Dematerialisation is the process by which shares in the physical form are cancelled and they are issued in electronic form. The certificates are known as demat shares. This process eliminates the time and manpower involved in transfer and registration of shares from the seller to the buyer05.What do you mean by moorat trading?It is the auspicious trading on a special day, say Diwali during some specified hours.06.What do you mean by rights issue?It is the issue of new shares to the existing shareholders in a fixed ratio to those already held at a price which is generally below the market price of the old shares.07.What do you mean by futures?It is a standard contract issued on an agreement to buy or sell an asset at a certain price at a certain time in future. It is an obligation on the buyer to purchase the underlying instrument and the seller to sell it.08.What do you mean by forward?The forward is a contract that is traded off the stock exchange and it is self regulatory and has certain flexibility unlike future which are traded at stock exchange only and it do not have flexibility of quantity and quality of commodity to be delivered and these are regulated by Securities Exchange Board of India, Reserve Bank of India or other agencies.09.What do you mean by factoring?Factoring is an arrangement in which short term domestic receivables on sale of goods or services are sold to a company called as factor and this scheme came into existence during 1991 based on the report of Kalyanasundaram Committee10.What do you mean by forfeiting?Forfaiting represents the purchase of obligations, which fall due at some future date and arise from the delivery of goods in export transactions, without recourse to the previous holder of the obligations.11.What do you mean by leasing?A lease is a contract where the owner of the assets transfers the right to another person to use the assets against the payment of fixed lease rentals. In the case of one lease contract, there are two parties namely – the lessor or the owner and the lessee or user. The lessor remains owner and the leased property remains with the possession of the lessee.12.What do you mean by debt market?It is a market wherein the debt instruments are issued to the public by any company for investment and such debt instrument bears a fixed interest rate payable half yearly on specific dates and principal amount repayable on particular date on redemption. Debentures are normally secured/charged against the asset of the company in favour of debenture holder. The following are some debt instruments – debenture; bond; zero coupon bond; convertible bond; security receipts etc.,13.What do you mean by greenshoe option?It is an option provided by Securities and Exchange Board of India to a company which is coming out with one initial public offer to the public. By this option, the company can retain certain portion of the applications received through IPO in case of oversubscription.14.What do you mean by equity market?Equity market consists of investment by the public in different kinds of shares issued by the company and by subscribing for the shares, the investors are expressing their willingness to stand as owners of the company. The equity market consists of equity shares, preference shares, rights shares, bonus shares etc.,15.What do you mean by sweat equity?Directors and employees contribute intellectual property rights to the company in the form of providing technical know-how captured by way of research or contributed by way of strategy software developed for the company or adding profit and economic value. To compensate the directors and employees, the concept of sweat equity has come into existence.16.What do you mean by participatory notes?A participatory note is a financial derivative instrument issued against an underlying security and it allows the holder, to get dividend or capital gains earned from the underlying security although some of the holders may not be eligible to trade in stock markets in India.17.What do you mean by book building?Book building is the process to assess the demand for a particular public issue of various prices, based on which the issue is priced and sold to the investors.18.What do you mean by sensex?It is a stock market index provided by Bombay Stock Exchange for the information of the investors. The positive or negative variation in the index provides an insight for investment or dis-investment to the general public and especially the investors in the stock market. It is based on the market capitalization of top thirty shares earmarked by BSE19.What do you mean by Nifty?It is a stock market index provided by National Stock Exchange for the information of the investors. The positive or negative variation in the index provides an insight for the investment or dis-investment to the general public and especially the investors who are participating in stock market trading. It is based on the market capitalization of top fifty shares earmarked by NSE20.What do you mean by swap?A swap is a contract that binds two counterparties to exchange the different streams of payments over the specified period at specified rate.

For officers there will be questions on economics, banking, finance and general affairs only (the recent events)Please note that the interview for bank placements are conducted by retired bank officials and more than 95 percent questions will be only on the above subjects and rarely one or two questions will be asked in engineering - electronics, information technology, mechanical engineering etc.,In fact the exact qualification meant for bank job is B. Com.The graduate knows about various types of accounting, economics, finance, management accounting etc and he will be more comfortable than others.Please concentrate on the following subjects:Types of accountsTypes of firmsFinancial statementsBalance sheet, profit and loss account, cash flow statement and funds flow statementVarious balance sheet ratiosVarious financial termsRead the following sample questions:Selected Interview QuestionsCandidate: 00101.Why you are willing to join in a bank?I am willing to join in a bank since I hope that I may be having more opportunities to serve the public. Banks have better career opportunities by means of periodical promotions to higher cadre.02.What do you mean by appraisal of gold loans?Gold loans are granted against the security of gold jewellery namely gold chains, necklaces etc., The jewellery apart from gold contains certain amount of copper and stones. Appraiser is a person well versed in the art of appraising the jewellery and on appraisal of the jewellery, he will be finding out the approximate gold content so that the bank may be able to provide loans against the gold content.03.What are the different kinds of term deposits available in a commercial bank?The different kinds of term deposits available in a commercial bank are – fixed deposit, recurring deposit and reinvestment deposit. In the case of fixed deposit, a fixed amount is accepted for a definite period and interest is paid on quarterly basis. In the case of reinvestment deposit which is similar to fixed deposit, interest is paid on maturity since interest is reinvested. In the case of recurring deposit, monthly instalments are accepted for a fixed period.04.What is the minimum period for which a fixed deposit is accepted and the maximum period for which a fixed deposit is accepted?The minimum period for which fixed deposit is accepted is seven days and the maximum period is ten years.05.Whether a fixed deposit can be accepted for a period more than ten years?In the case of deposits in the names of minors on account of settlement of claims, the deposit can be for more than ten years06.What do you mean by FERA?FERA means foreign exchange regulations act and it came into effect from the year 1973. An act to regulate certain payments dealing in foreign exchange, securities, the import & export of currency and acquisition of immovable property by foreigners. Under Section 31 (1) of the Foreign Exchange Regulation Act ( FERA) of 1973, it is mandatory for foreign corporations, which are not incorporated in India to obtain permission from the Reserve Bank Of India (RBI) to acquire, hold, transfer or dispose off in any manner (expect by way of lease for a period not exceeding five years) any immovable property in India.07.What do you mean by ECS?ECS means electronic clearing service and the customer can authorize on periodical basis to make payment of certain utility bills like electricity charges, water charges etc., by debiting his account till such time he submits a revocation letter. Similarly, he can authorize corporate to credit the dividends on shares and interest on debentures as and when due to the credit of his account with the bank.08.What is the minimum amount that can be sent through RTGS?The minimum amount that can be sent through RTGS is Rupees two lakhs and there is no maximum limit09.What is the maximum amount that can be remitted through NEFT?There is no or maximum limit for remittances sent through NEFT10.What is the maximum amount that can be sent abroad by any resident individual?Under liberalized remittance scheme, all resident individuals including minors are allowed to freely remit an amount upto US dollars 250000 (or its equivalent freely convertible foreign currency) per financial year11..What is the name of apex bank which is responsible for the development of agriculture in the country?NABARD is the 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?National old age pension scheme; Jawahar Gramin Samruddi Yojana; National Family Benefit scheme; Mahatma Gandhi National Rural Employment Guarantee Scheme; National Maternal Benefit Schemel Annapurna etc.,13.What do you mean by crossing of any cheque?Writing of two parallel transverse lines drawn on the face of the cheque on top left hand corner with or without any words between the lines is known as crossing and it is for the purpose of making payment of the cheque through an account in the name of the payee or holder.14.What are the different kinds of crossing?Two parallel transverse lines drawn on the face of the cheque on top left hand corner of the cheque with any words or without any words is known as general crossing and the the payment can be made to the account of the payee or holder with any bank. In case the name of any bank is mentioned within the two parallel lines, it is known as special crossing and in this case, the payment should be made to the account of the payee or holder with the bank mentioned in the crossing only and not to any other bank.15.What do you mean by CASA?CASA means current and savings and this is applicable to computerized branches linked under core banking solution16.Whose signature is available in Rs. 100/- currency note?The signature of RBI governor is available in Rs. 100 currency note17.What do you know by dividend?Dividend is the return available in the form of money for the investments made by the shareholders in the equity shares and preference shares of any company.18.Bank holidays are declared according to which act?Holidays for banks are declared according to Negotiable Instruments act 1881 by the respective state governments in their states. However, all Sundays, all second and fourth Saturdays have been declared as holidays apart from the holidays permitted for religious and national ceremonies.19.Banks are functioning according to which act?Commercial banks in the country are functioning according to Banking Regulation act 1949 and to some extent as per Reserve Bank of India act 193420.RBI is functioning in the country as per which act?Reserve Bank of India is functioning according to Reserve Bank of India act 1934.Candidate: 00201.What do you mean by a guarantee?Guarantee is an undertaking executed by one person called as guarantor in favour of another person called as beneficiary expressing his intention to make payment in the event of failure of the principal debtor on payment of a debt or failure to perform any contract within the stipulated time or according to the terms of the contract.02.What are the different types of guarantees?The different types of guarantees are financial guarantee, performance guarantee and deferred payment guarantee03.What do you mean by letter of credit?Letter of credit is an undertaking executed by one banker on behalf of its customer to honour bills and documents drawn by another person as per the terms and conditions as mentioned in the letter of credit04.What do you know by packing credit advance?It is the preshipment advance granted by one bank to the exporter for the purpose of procuring raw materials; payment of various duties like customs duty, excise duty; packing charges; shipment charges etc.,05.What do you mean by special crossing?In case the name of any bank is mentioned within the two parallel lines, it is known as special crossing and in this case, the payment should be made to the account of the payee or holder with the bank mentioned in the crossing only and not to any other bank.06.What do you know by IFSC code ?IFSC means Indian Financial System Code and this is one alphanumeric code consisting of eleven digits of which the four alphabetic digits represent the name of the bank mentioned in abridged form and the next zero is known as control number and the last six numeric digits represent the branch code of the bank.07.Which is called as mother of deposits?Savings deposit is known as mother of deposits. Normally the first time customers will be advised to open savings deposits with the bank branch before availing any other facility with the bank08.Who is a called as natural guardian?Bother mother and father are known as natural guardian for the purpose of opening accounts in the name of minors represented by the guardian.09.Whether grandfathers and grandmothers can be natural guardians?Grand fathers, grandmothers grand grandfathers or grand grandmothers cannot represent as natural guardians on be behalf of the minors10.Which type of credit facility is available to a farmer for raising crops?For raising crops, the farmers are provided with crop loans, Kisan Credit Cards etc.,11.What do you mean by NULM?National Urban Livelihoods Mission (NULM) was launched by the Ministry of Housing and Urban Poverty Alleviation (MHUPA), Government of India in 24th September, 2013 by replacing the existing Swarna Jayanti Shahari Rozgar Yojana (SJSRY).The NULM will focus on organizing urban poor in their strong grassroots level institutions, creating opportunities for skill development leading to market-based employment and helping them to set up self-employment venture by ensuring easy access to credit. The Mission is aimed at providing shelter equipped with essential services to the urban homeless in a phased manner. In addition, the Mission would also address livelihood concerns of the urban street vendors12.What do you mean by Gram Sadak Yojana?The Pradhan Mantri Gram Sadak Yojana called as PMGSY was launched by the Government of India for the purpose of providing connectivity to unconnected habitations as part of a poverty reduction strategy. Government of India is endeavouring to set high and uniform technical and management standards and facilitating policy development and planning at state level in order to ensure sustainable management of the rural roads network.13.What are the salient features of MGNREGA?MGNREGA is known as Mahatma Gandhi National Rural Employment Guarantee act and according to this employment is guaranteed at least one person per household in rural areas. It aims at enhancing the livelihood security of people living in rural areas by guaranteeing hundred days of wage employment during each financial year to a rural household whose adult members volunteers to undertake unskilled manual work14.Which authority is supervising the functions of insurance companies?IRDA – Insurance Regulatory and Development Authority is the authority responsible for supervising the functions of insurance companies in our country15.What is meant by IPO?IPO means initial public offer and this is the first time public offer of equity shares, preference shares or debentures to the public for subscription16.What is meant by ASBA?ASBA means applications supported by blocked amount. Nowadays investors are permitted to remit the amount through ASBA demand drafts drawn in ASBA accounts for the purpose of subscribing shares or debentures through initial public offer and further public offer. When the demand draft is issued, instead of debiting the amount in the account, the amount is blocked till such time the shares or debentures are allotted. On allotment, the entire amount is debited; in the case of partial allotment, the amount is debited equivalent to the value of allotment and in the case of non allotment, the entire amount is allowed for further use. For the intervening period, the depositor earns interest as applicable to the category of deposits.17.What is meant by Performance guarantee issued by any commercial bank?In the case of contracts in favour of governments, the contractors are in a position to provide a bank guarantee by a reputed commercial bank, thereby undertaking to guarantee the government department to compensate the loss on account of failure of performance of the contract by the contractor within the due date or failure to perform the contract as per the terms and conditions of the contract. This is known as performance guarantee.18.What do you mean by packing credit facility issued by any commercial bank?Packing guarantee is known as preshipment advance provided by the commercial bank to the exporter for the purpose of procuring raw materials, packing materials or making payment towards customers duty, excise duty, transportation charges etc.,19.What do you mean by notice money?Notice money is money borrowed for a period of two days and more and upto fourteen days in the call money market.20.Treasury bills are issued by which authority and what are the different kinds of treasury bills available in the country?Treasury bills are issued by central government and state governments for the purpose of mobilizing funds from the public and others towards meeting the cost of various projects. There are three kinds of treasury bills as at present namely – 91 days, 182 days and 364 days. 91 days treasury bills are issued each Friday and the notified amount is Rupees one hundred crores. 182 day treasury bills are issued during alternative Wednesdays which is non reporting week and the notified amount is Rupees 100 crores and 364 days treasury bills are issued on alterntive Wednesdays which is a reporting week and the notified amount is Rupees 500 crores.Candidate: 00301.What do you know by PIN number?PIN number is four digit number expressed in numerical characters. PIN number is used for the transactions done using debit cards and credit cards through automated teller machines and point of sale terminals.02.What do you know by PAN number?PAN number is known as permanent account number. This is used for the purpose of remittance of income tax with income tax department. Tax payers should get one PAN number by sending an application along with relevant documents and by payment of specified sum of money to Income tax department or their agencies. It is ten digit number consisting and alphapetical and numerical characters.03.What are the functions of DICGC?DICGC means Deposit Insurance and Credit Guarantee Corporation and this corporation provides deposit insurance upto an amount of Rupees one lakh per depositor per bank in the event of insolvency of the bank and it also provides small loans guarantee upto certain limits04.What is the role played by ECGC?ECGC provides guarantee support to the exporters of the country in the form of several export guarantees05.Mention the Regional Rural Banks which are functioning in Tamilnadu?The Regional rural banks which are functioning in Tamilnadu are Pandiyan Grama Bank and Pallavan Gramin Bank. Pandiyan Grama Bank has been sponsored by Indian Overseas Bank and pallavan Gramin Bank has been sponsored by Indian bank.06.What do you mean by Mergers and what are the different kinds of mergers?When two independent units merge together to form a single unit, it is known as merger. The mergers can be vertical merger, horizontal merger, reverse merger, consolidation, amalgamation etc.,07.What do you mean by horizontal merger and reverse merger?When the business functions of two units are identical in nature and when the merger takes place between those units, it is known as horizontal merger. New Bank of India merged with Punjab National Bank and both are banking organizations. Industrial Credit and Investment Corporation of India Limited was instrumental in establishing ICICI bank as per LPG norms and subsequently Industrial Credit and Investment Corporation Limited merged with ICICI Bank and when a parent unit gets merged with an ancillary unit, it is known as reverse merger.08.Which are the top two private sector banks in our country?The top private sector banks in our country are HDFC bank limited and ICICI bank limited09.Whether housing loan is a priority sector advance and if so, upto what amount?Housing loans granted are treated as priority sector advances subject to certain conditions. Loans to individuals up to Rupees 28 lakh in metropolitan centres (with population of ten lakh and above) and loans up to Rupees 20 lakh in other centres for purchase/construction of a dwelling unit per family, are eligible to be considered as priority sector provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rupees 35 lakh and Rupees 25 lakh, respectively. Housing loans to banks’ own employees are not eligible for classification under priority sector.10.Whether educational loan is a priority sector advance?Loans to individuals for educational purposes including vocational courses upto Rupees 10 lakh irrespective of the sanctioned amount are eligible for classification under priority sector.11.What do you mean by micro, small and medium enterprises?The classification is based on original investment in plant and machinery: For micro enterprises, upto Rs. 25 lakhs for manufacturing units and Rupees 10 lakhs for service units; For small enterprises, for manufacturing units above Rupees 25 lakhs and upto Rs. 5 crores and for service units above Rupees 10 lakhs and upto Rupees 2 crores; For medium enterprises, for manufacturing units above Rupees 5 crores and upto 10 crores and for service units above Rupees 2 crores and upto Rupees five crores12.What do you mean by KYC and name any two important documents which are obtained as per KYC?KYC means know your customer guidelines and these guidelines were prescribed by RBI for new customers who are willing to open accounts with commercial banks and according to KYC, any new customer who is willing to open accounts with commercial banks should submit the photocopy of anyone of the following namely; driving licence, voter id card, AADHAARA card, passport as address proof and photocopy of anyone of the following namely; driving licence, voter id card, AADHAAR card, passport, pancard as identity proof. KYC is antimony laundering device.13.What is the present repo rate and reverse repo rate?The present repo rate is 6.25% and reverse repo rate is 5.75%14.In the case of MICR code, the middle three digits represent what?MICR code consists of nine numerical digits and the middle three numerical digits represent bank name15.PAN number consists of how many alpha characters?PAN number consists of ten digits. The first three alpha characters are random alphapetical characters between AAA to ZZZ; next one alpha character represents the category of the cardholder; the next one alpha character represents the first character of the name of the cardholder; the next four numerical digits are auto generated sequential numbers and the last one single alpha character is a check digit.16.What do you know by biometric automated teller machines?In the case of automated teller machines, the four digit numerical PIN number is used for performing transactions using debit card and credit card. In the case of biometric automated teller machines, instead of PIN numbers, anyone of the following body parts is used – left hand thumb impression; eye retina and voice recognition. In India, the left hand thumb impression is the accepted mode and these kinds of automated teller machines are known as green label automated teller machines.17.What is the criteria by which a bank is considered as largest bank?For the purpose of ranking, a bank is considered to be largest or smallest taking into consideration the business position of the bank; namely – the total deposits and total advances as at the end of March each year.18.What do you mean by commercial paper?Commercial papers are issued by well rated organizations for mobilizing funds from the public and other corporate. They are issued at a discount and they are freely negotiable by endorsement and delivery. The minimum maturity period is seven days and the corporate should have earned credit rating equivalent to P2 issued by CRISIL19.What do you mean by FCNR?FCNR means foreign currency non resident accounts. Non resident Indians and Persons of Indian origin are eligible to invest in this deposit. It is a term deposit accepted in the currencies – US dollar, Sterling Pound, Euro, Japanese Yen, Canadian dollar and Australian dollar. The minimum period of deposit is one year and the maximum period is five years and the deposit is held in foreign currencies and the interest earned is free from income tax.20.What do you mean by Escheat?He is a person who dies without leaving any legal heirs and in this case, his estate will revert to the state government.Candidate: 00401.What do you mean by money laundering?Using the banking channel for the purpose of bringing illegal money is known as money laundering.02.What do you mean by subprime lending?Mass lending by commercial banks to the borrowers without ascertaining the credit worthiness of the borrowers03.What is meant by LPG and who is responsible for introduction of LPG strategy in our country?LPG means liberalization, privatization and globalization and this was coined by Dr. Manmohan Singh, the then finance minister of our country. The salient highlights of the Liberalisation, Privatisation and Globalisation Policy in India are: Foreign Technology Agreements; Foreign Investment; MRTP Act, 1969 (Amended); Industrial Licensing; Deregulation Beginning of privatization; Opportunities for overseas trade; Steps to regulate inflation; Tax reforms; Abolition of License -Permit Raj04.What do you mean by PURA?PURA means providing urban amenities in rural areas. This concept was coined by Dr. A.P.J. Abdul Kalam, the then president of India.05.What do you know by current ratio?It is one equation between current assets and current liabilities. This ratio provides the liquidity position of the organization. When the ratio is more than one it is known as positive current ratio and the unit is having sufficient working capital and when it is less than one, the unit is found to have more current liabilities than current assets and the liquidity position is found to be very weak.06.What do you know about negotiable instruments act?In India, the negotiable instruments act was passed during 1881 which came into force with effect from March 01, 1882. Negotiable instruments means and include promissory note, bills of exchange and cheque payable to order or bearer. Promissory note, bill of exchange, cheque and demand draft are negotiable instruments.07.What do you know by MICR?MICR means magnetic ink character recognition. MICR code is available in MICR bank at the bottom of the cheque or demand draft. It consists of nine numerical digits of which the first three digits represent the centre/city; the middle three digits represent the bank and the last three digits represent the branch of the bank.08.When it comes to rural lending, which are all considered to be priority sector advances?When it comes to rural lending, the loans granted to the following are considered to be priority sector advances – Loans granted to all agriculture related activities; self help group; Differential rate of interest; Loans to SC/ST beneficiaries; Loans provided to doctors for setting up clinics in rural areas; Loans to dealers in fertilizers and pesticides; loans to dealers of springler irrigation and drip irrigation equipments etc.,09.Who is called as an authorized dealer?Authorised dealer is at present known as authorized person. Authorised person is an individual or organization permitted to deal in foreign exchange business in the country.10.What do you know by financial inclusion?Financial inclusion means the following: Providing formal banking services to poor people in urban and rural areas; Promoting the habit of money savings, insurance, pension-investment among poor people; Helping the people in getting loans at reasonable rates from commercial banks so that they do not become victims to local moneylenders11.What are the important initiatives taken through financial inclusion in the country?The following are the important initiatives taken through financial inclusion in our country: Lead banking scheme; No frill accounts; Basic savings bank deposit accounts; JANDHAN accounts; business correspondent and business facilitator facilities; Swabhiman campaign;12.What do you mean by MCLR?MCLR replaces the base rate system. RBI introduced the system with effect from 01.04.2016 in order to determine the base rate by commercial to improve the efficiency of monetary policy transmission. All rupee loans sanctioned and credit limits renewed with effect from 01.04.2016 to be priced with reference to MCLR and it will be an internal benchmark for the banks. It consists of marginal cost of funds, negative carry on account of CRR, operating costs and tenor premium. The marginal cost of funds consists of two components namely; marginal cost of borrowings and return on networth13.What are the major money market instruments?Certificate of deposits; Commercial paper; Inter Bank participation certificates; iner bank term money; Treasury bills; Bills rediscounting and call/notice money14.What are the differences between NEFT and RTGS?Both are two categories of online remittance facilities through CBS enabled branches of commercial banks. The minimum balance that can be sent through RTGS is Rupees two lakhs whereas in the case of NEFT, there is no such limit. The beneficiary gets his funds at real time and it means instantaneously without any loss of time. In the case of the beneficiary gets his funds in between batches15.Who is deciding the rate of interest for savings deposit accounts?Rate of interest for savings deposits is decided by respective commercial banks only and RBI has permitted full freedom in this connection.16.Who cannot open savings deposit accounts?Proprietorship concerns, partnership firms, limited liability partnership firms, private limited companies and public limited companies are not permitted to open savings accounts17.What is meant by memorandum of association?Memorandum of association is the parent document for any company whether it is a private limited company or private limited company. It contains the details of formation of the company, policies, objectives, registered office and more.18.What is known as power of attorney?Power of attorney is an authorization given by one person called as principal in favour of another person called as an agent authorizing the agent to perform certain activities on behalf of the principal and it can be specific power of attorney or particular power of attorney.19.In which currencies FCNR accounts can be opened in our country?FCNR account can be opened in the following currencies namely; US dollars, Sterling Pounds; Euro; Japanese Yen; Australian dollars and Canadian dollars.20.What are the differences between NRE and FCNR?NRE and FCNR accounts are opened by non resident Indians and Persons of Indian Origin in India. NRE accounts are to be opened in rupees whereas FCNR is opened in foreign currencies. NRE accounts can be opened in the form of savings account, current account, reinvestment deposit and fixed deposit whereas, FCNR account is permitted to be opened as fixed deposit or reinvestment deposit. NRE term deposits can be opened for a minimum period of seven days and maximum period of ten years. FCNR accounts can be opened for a minimum period of one year and maximum period of five years.Candidate: 00501.What do you mean by masala bonds?Masala bonds are the bonds issued for rupee denominated borrowings by Indian companies in overseas markets02.What do you mean by secondary market in our country?Secondary market pertains to capital market and it is also known as stock exchange or old issues market. Shares, debentures and bonds can be bought and sold from the stock exchange through registered brokers.03.What do you mean by fund based limits and non fund based limits?The loans provided to the borrowers in the form of term loans, overdrafts, cash credits and bills discounting limits are known as fund based limits since funds are released to the borrowers. Guarantees and letter of credits are non fund based limits since no funds are provided for the time being since they are contingent liabilities.04.What do you mean by off balance sheet items?Guarantees, letter of credits and bills sent for collection for which proceeds are yet to be realized are known as off balance sheet items05.What do you mean by closed ended scheme?This is one form of mutual fund scheme. Like initial public offer, the scheme is open for a certain period only and after which the public cannot invest their amount in the units under this scheme.06.What do you mean by open ended scheme?This is one mutual fund scheme and the units under scheme can be purchased and sold at any time07.What do you mean by overdraft facility granted by a bank?Overdraft is a facility granted by the banks towards meeting the working capital requirements of a borrower. This is provided by means of credit limit over and above the current account balance and the borrower has to pay the interest as and when due.08.What do you mean by collateral security?Collateral security is an additional security provided by the borrower in addition to the primary security. For example, in the case of vehicle loan, the car purchased out of loan is known as the prime security and the insurance policy obtained by the bank from the borrower for the sanction of this loan is known as collateral security.09.In regard to educating a customer, what are the different kinds of information boards displayed in a bank branch?The following boards are available in the bank branches – Working hours and business hours; Interest rates on various deposits; Interest rates for loans; Service charges; Time norms for various services; Details of schemes available in the branch10.Who is the present RBI Governor?The present governor of RBI is Shri Urjit Patel and he is functioning as the governor of RBI since 04th September, 201611.What do you mean by unclaimed deposits?The deposits which are not in operation for more than ten years are known as unclaimed deposits. For the purpose of this classification, the customer induced transactions are only taken into account.12.How many regional centres are available for RBI in the country?Reserve Bank of India has four regional centres at the following places – Chennai, Kolkatta, New Delhi and Mumbai.13.What do you mean by white label automated teller machines?The automated teller machines which are maintained and managed by non bank entities are known as white label automated teller machines. In our country TATA Indicash and Muthoot finance are having such machines installed at various centres.14.What are the advantages of CTS?CTS means cheque truncation scheme. This is used for clearing purpose. Normally commercial banks used to send the physical cheques through their15.What do you mean by certificate of deposits?Certificate of deposits are issued by scheduled commercial banks (except Regional Rural Banks) and all financial institutions within their umbrella limits. Individuals, corporate, companies, trusts, funds and associations can invest in certificate of deposits and they are issued for a minimum period of seven days and maximum period of twelve months in the case of commercial banks and in the case of financial institutions the minimum period is one year and maximum three years, Minimum amount for investment is Rupees one lakh and in multiples of Rupees one lakh.16.RBI is called by which names – mention four names?RBI is called by the following names – banker to banker; lender of the last resort; custodian of banks; banker to government;17.What do you mean by ways and means advances?Ways and means advances were introduced as per an agreement between Reserve Bank of India and Government and they are temporary overdraft facilities provided by RBI to central government and state governments and the purpose is to bridge the time interval of mismatch the government expenditure and receipts. The duration of the limit is ten days for central government and 14 days for state government departments.18.Who is banking ombudsman and by whom he is appointed?Banking Ombudsman is an arbitrary authority who resolves the complaints received from the customers of commercial banks in regard to bank related issues.19.What do you mean by EEFC account?Exchange Earner’s Foreign Currency account is an account maintained in an account maintained in foreign currency with an authorized dealer ; i/e/ a bank dealing in foreign exchange. Professionals, exporters, trainers etc., who are in receipt of foreign exchange for the services extended by them in foreign countries can invest the amount in EEFC account and the account will be in the form of current account and no interest is paid for the balance held in EEFC account.20.What do you know by NBFC?NBFC means non banking finance companies. It is a company registered under Indian Companies act 1956 and presently 2013 engaged in the business of providing loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire purchase, insurance business, chit fund business etc.,Candidate: 00601.What do you mean by arbitrage?It is the process of purchase of one security from one market and selling the same security for earning a profit at the same time at another market.02.What do you mean by Bonus shares?It is the free allotment of shares in certain proportion to the existing shares held by the shareholders of a company and this is a means of providing reward to the investors for their contribution to the growth of the organization by capital investment03.What do you mean by Bull?It is a term given to a speculator on stock exchange who buys the securities in expectation of a rise in the prices. The market is called as bullish when there is a domination of buyers over the sellers04.What is known as dematerialization?Dematerialisation is the process by which shares in the physical form are cancelled and they are issued in electronic form. The certificates are known as demat shares. This process eliminates the time and manpower involved in transfer and registration of shares from the seller to the buyer05.What do you mean by moorat trading?It is the auspicious trading on a special day, say Diwali during some specified hours.06.What do you mean by rights issue?It is the issue of new shares to the existing shareholders in a fixed ratio to those already held at a price which is generally below the market price of the old shares.07.What do you mean by futures?It is a standard contract issued on an agreement to buy or sell an asset at a certain price at a certain time in future. It is an obligation on the buyer to purchase the underlying instrument and the seller to sell it.08.What do you mean by forward?The forward is a contract that is traded off the stock exchange and it is self regulatory and has certain flexibility unlike future which are traded at stock exchange only and it do not have flexibility of quantity and quality of commodity to be delivered and these are regulated by Securities Exchange Board of India, Reserve Bank of India or other agencies.09.What do you mean by factoring?Factoring is an arrangement in which short term domestic receivables on sale of goods or services are sold to a company called as factor and this scheme came into existence during 1991 based on the report of Kalyanasundaram Committee10.What do you mean by forfeiting?Forfaiting represents the purchase of obligations, which fall due at some future date and arise from the delivery of goods in export transactions, without recourse to the previous holder of the obligations.11.What do you mean by leasing?A lease is a contract where the owner of the assets transfers the right to another person to use the assets against the payment of fixed lease rentals. In the case of one lease contract, there are two parties namely – the lessor or the owner and the lessee or user. The lessor remains owner and the leased property remains with the possession of the lessee.12.What do you mean by debt market?It is a market wherein the debt instruments are issued to the public by any company for investment and such debt instrument bears a fixed interest rate payable half yearly on specific dates and principal amount repayable on particular date on redemption. Debentures are normally secured/charged against the asset of the company in favour of debenture holder. The following are some debt instruments – debenture; bond; zero coupon bond; convertible bond; security receipts etc.,13.What do you mean by greenshoe option?It is an option provided by Securities and Exchange Board of India to a company which is coming out with one initial public offer to the public. By this option, the company can retain certain portion of the applications received through IPO in case of oversubscription.14.What do you mean by equity market?Equity market consists of investment by the public in different kinds of shares issued by the company and by subscribing for the shares, the investors are expressing their willingness to stand as owners of the company. The equity market consists of equity shares, preference shares, rights shares, bonus shares etc.,15.What do you mean by sweat equity?Directors and employees contribute intellectual property rights to the company in the form of providing technical know-how captured by way of research or contributed by way of strategy software developed for the company or adding profit and economic value. To compensate the directors and employees, the concept of sweat equity has come into existence.16.What do you mean by participatory notes?A participatory note is a financial derivative instrument issued against an underlying security and it allows the holder, to get dividend or capital gains earned from the underlying security although some of the holders may not be eligible to trade in stock markets in India.17.What do you mean by book building?Book building is the process to assess the demand for a particular public issue of various prices, based on which the issue is priced and sold to the investors.18.What do you mean by sensex?It is a stock market index provided by Bombay Stock Exchange for the information of the investors. The positive or negative variation in the index provides an insight for investment or dis-investment to the general public and especially the investors in the stock market. It is based on the market capitalization of top thirty shares earmarked by BSE19.What do you mean by Nifty?It is a stock market index provided by National Stock Exchange for the information of the investors. The positive or negative variation in the index provides an insight for the investment or dis-investment to the general public and especially the investors who are participating in stock market trading. It is based on the market capitalization of top fifty shares earmarked by NSE20.What do you mean by swap?A swap is a contract that binds two counterparties to exchange the different streams of payments over the specified period at specified rate.

Whenever I talked about investing in cryptocurrencies such as Bitcoin with friends, most of them would not take me seriously. Their immediate defence: "these are too risky". Warren Buffett, the most successful investor of all time has the following words of wisdom on risk. "Risk comes from not knowing what you are doing."Today, fixed deposits give you a return of 6-7 per cent/annum. Long term bonds give you a return of around 8per cent/annum. Gold, for which Indians have insatiable appetite, has historically not delivered more than 10 per cent CAGR since the last 30 years.Equities (Stocks) which are much better have delivered good returns at 17 per cent CAGR for more than two decades now.Traditionally, people balanced their investment portfolios through a mix of fixed deposits, post office, chit funds, gold, mutual funds, equities, and cash.But, what if you knew more details about these crypto currencies. Perhaps, then, you may not fear them. I have always held the belief that investing in stocks is definitely a path to financial freedom, if done rightly. I am now updating that thought process including cryptocurrencies as well.These cryptocurrencies have evolved since their inception over the past many years and now are at inflection point. Infection point is a point where a significant change happens leading to rapid progress in its valuation.With that in mind, let's dive in to know more details about cryptocurrencies and ascertain whether they are risk free or not.Market capitalizationIn stock markets, blue chip stocks are considered to be safe bets and hence become part of investors portfolios. Primarily, because of large market capitalization and they being industry leaders.For those who are unaware, market capitalization is the total value of the shares issued by the company at the current market value.For example, ICICI bank which is considered to be a blue chip stock has a market cap of $30 billion. On the other hand, consider bitcoin, which came into inception in the year 2009 and today has a market capitalization of close to $158 billion.Even if you compare bitcoin's market cap with US giants like Starbucks and American Express, it has surpassed them very recently.Similarly, ethereum which is bitcoin's rival, has a total market cap of $46 billion. And the combined market cap of all the cryptocurrencies put together is around $300 billion.Definitely these are impressive numbers which are slated to grow by leaps and bounds in the years to come.So, from the market capitalization point of view, these virtual currencies seem to qualify assafe investments.Blockchain TechnologyBitcoin and all other cryptocurrencies use blockchain technology to record their transactions.Essentially, the blockchain is like a publicly distributed ledger for financial transactions, meaning a shared ledger. To give you an analogy, imagine a spreadsheet that is duplicated hundreds of times across computers in a network. Now, imagine this network is designed to regularly update this spreadsheet, that's blockchain for you.The benefits of the block chain technology being that it is transparent and secure so there are less parties involved in facilitating each and every transaction.Although currently used for cryptocurrencies, it has immense potential be used in a wide variety of financial applications in the future.Sample this, United Nations World Food Program has used Ethereum blockchain to transfer food vouchers based on cryptocurrencies to people in Syria. Based on this success, the UN plans to use more blockchain technology based cryptocurrencies to transfer aid to the needy organizations and people across the World.Advanced nations like Japan and developing nations like Philippines have recognized Bitcoin as a legal form of payment paving the way for more nations to follow suit.Multinational Corporations like Cisco, IBM, Intel, JP Morgan are exploring uses of blockchain in supply chains and commercial business transactions.With the use of blockchain technology being heavily considered by many institutions, countries, and business as of now, crypto currencies will see rapid rise among users across the World in the near future.GrowthBitcoin which is the first crypto currency to hit the market was launched in the year 2009. It was invented by a person or group using the alias Satoshi Nakamoto, after which the US Treasury has categorized it as a decentralized crypto currency.Here, I would like to make one analogy between startups and cryptocurrencies.Steve Wozniak, who co-founded Apple along with Steve Jobs, wanted to build his own computer in the year 1975. He knew how to build it, so he was able to make one. But, people said that no one needs a computer. Later, computer market became so huge that all big companies wanted to get the share.Similarly, when bitcoin got launched in 2009, no one believed that it will work. People were not ready to invest in bitcoins. Back then, 1 bitcoin was = $1.Cut to today, 1 bitcoin = $9600. What an insane growth it has witnessed.Along the way in these many years, despite a lot of volatility, controversies, speculations, theft, and other criminal activity, it has survived and continued to grow.And recent developments in the financial world indicate that investors started looking at bitcoin and other cryptocurrencies as an asset class for long term investment indicating that they are here to stay.Mainstream investorsBitcoin and other form of digital currencies are increasingly finding acceptance among many mainstream investors and hedge funds.Earlier this year, the SBI Group, a $3 billion financial conglomerate based in Tokyo, established SBI Virtual Currencies for investors looking to trade bitcoin for the Japanese yen.Rothschild, a US based boutique investment firm has invested about $200,000 worth into bitcoin.Another billionaire hedge fund investor Mike Novogratz who made it into the Forbes billionaire list in 2008 holds 10 percent of his net worth in bitcoin and ethereum. He was one of the early investors of bitcoin and ethereum.Winklevoss twins brothers, who lost out to Mark Zuckerberg for control of Facebook, have invested $11 Million in bitcoin in the year 2013.There are such investments by other prominent investors from across the world, some keeping the portfolio size small and the others keeping it as a top holding.These moves should not come as a surprise given the slow and the increased support in the investment world.AdaptabilityStandpoint Research founder and noted stock market analyst Ronnie Moas has projected that bitcoin will reach a value of $15,000-$20,000 by 2020 and the total market cap of all crypto currencies will be around $2 trillion in the next 10 years.There are other cryptocurrency industry voices that project the value of bitcoin to be between $100,000 and $1 Million by year 2026.Like any other successful emerging technologies, for the bitcoin and other cryptocurrencies to really take off and attain such kind of high valuations, what matters is their adaptability.Imagine, if you cannot walk into a supermarket and buy groceries with these digital currencies. They would be worth zero and of no value.As of today, cryptocurrencies are at a point known as chasm.In the language of product adoption lifecycle, chasm can be defined as a point that a product, technology, or in this case cryptocurrencies like bitcoin need to cross to move into a mass market segment.As seen in the below picture, currently, cryptocurrencies are in an early adopter stage where in some of the countries have accepted it, a few hundreds of thousands of merchants are accepting it, and a few million retail investors are investing in it across the world.So, as more and more people across the World start accepting and investing in these cryptocurrencies and the blockchain technology becomes more ubiquitous, these digital currencies will cross the chasm leading to rapid adoption by the masses.Such a behavioural change is slowly taking place and once it becomes a norm, there is no stopping these currencies and such high valuations which I spoke about would be attained.Consider this, most people who didn't buy Bitcoin initially started buying it after it breached $1000, some more started buying it after it crossed $4000, and in the future a greater percentage of people will buy it once it breaches $10,000.Cryptocurrencies status in IndiaAccording to Reserve Bank of India, there are about 2500 people in India who are actively investing and trading in bitcoins per day. Although the number is small when compared to investment vehicles like equities, it is catching up among people.From a regulatory sense, RBI has said in the past that it was not comfortable with the idea of cryptocurrency which is essentially a parallel to government issued currency- the rupee.However, RBI has asked a group of eminent experts to look into cryptocurrency and is in the process of preparing a policy on use of cryptocurrency in India. This includesGuidelines regarding investment and purchase of cryptocurrenciesMonitoring cryptocurrencies and the taxation of returns from bitcoin like currenciesMulling over implementation of KYC norms to ensure safe transactions of cryptocurrencies and regulating itIntroduction of government's own cryptocurrency similar to bitcoin called 'Lakshmi'We will get to know the Govt's official policy on cryptocurrencies in the months to come. But, despite this unregulated status, cryptocurrencies continue to thrive in India as of today.How to buy and cautionTo purchase cryptocurrencies like bitcoin, you need to pay money to someone else who is willing to sell it and then store it in an online wallet.In India, you can buy, sell, and save bitcoins through platforms such as UnoCoin and ZebPay. Alternatively, you can buy on exchanges such as Coinsecure.You can make your payment through bank transfer, credit cards, or PayPal and make use of the integrated online wallets provided by these platforms/exchanges to store your cryptocurrencies.The difference between buying on platforms and exchanges is that, on platforms you buy or sell for the prices set by these platforms. Whereas in exchanges, you will place your own orders to buy or sell and the exchange facilitates trades by processing the orders between buyers and sellers, like in stock markets.Other such exchanges where you can buy and sell cryptocurrencies currencies are Bitcoin-India, Btcxindia, Ethexindia, Bitxoxo.If you have read till this point, you must have realized that the tone of my article is pretty optimistic on the future of cryptocurrencies. In addition to the various factors I listed above, one of the primarily reasons for the same is - Scarcity.Like Gold, cryptocurrencies are limited in number and cannot be created arbitrarily. Take Bitcoin for example - there are only 21 million Bitcoins that can be ever mined. Neither Governments nor Banks can create more of it. Same goes for other cryptocurrencies as well.Because of this limited supply and more people wanting it, its value is continuously increasing.Nevertheless, as retail investors it is important to understand that there are certain inherent risks associated with investing in cryptocurrencies.1. Regulation by government and no legalityAs I stated above, currently, cryptocurrency investments are unregulated in India. Although RBI and Govt of India are working on coming up with a policy framework on it, it could also happen that Govt may decide to make cryptocurrency investments illegal since they have no control over it.In general, government's and central banks like to have control over their currencies like rupee, dollar to protect the economy from inflation, deflation, and other such economic factors, which is not possible in case of cryptos like bitcoin.2. Subject to market speculationLike equities in stock market, cryptocurrencies are subject to market speculation. This market speculation is affected by various factors like adoption of cryptocurrencies by people & institutions, regulation by governments, amount of cryptocurrencies in circulation, events affecting cryptocurrencies etc.As a result their values tend to fluctuate a lot, leading to volatility and perhaps losses. This will continue to happen till they reach a point of stability.3. No protection against fraudUnlike banks which are monitored by RBI and offer protection for customers, trading platforms and exchanges don't offer such protection.For example, if the platform/exchange goes out of business or is hacked by hackers, you have neither insurance nor proper protection mechanisms in place to address your grievance as authorities don't know how to address these issues yet.So, like any investment vehicle, one needs to exhibit caution and not be over ambitious with their investment in cryptocurrencies .So, a good way to start would be to allocate a small portion of your total portfolio in these currencies. When I say small portion, let it be the amount that you are okay to lose, assuming a worst case scenario. 5 per cent to 10 per cent of your total portfolio is the right way to invest.And definitely not your entire savings which is a bad idea.Invest in Dips or in a SIP fashion so that you can take advantage of the volatility and prepare yourself to stay invested for the long haul to reap huge profits of this new age investment.Few hours left to end #Bitcaptera ICO presale - Don't miss out on the presale bonus! Hurry before you loose hands on @bitcaptera ico token!24 hrs to end presale! Great time to buy!https://www.bitcaptera.com/Registration.aspx …