CLERKS AND P.O BANK RELATED JOB INTERVIEW CONVERSATION

 BANKING RELATED QUESTIONS

#1 -What is bank ?Explain types of banks and banking in india ?

Ans-Bank is financial  institution  which receive the deposits from public and lends the money for investment , In other words a bank  is any  financial  institution that receives, collects transfers pays exchanges  lends, invests or safeguards  money for its customers ,Now-days  banks are also taking part in many activities like  insurance, mutual funds credit cards et , These activities of the banks are know as para-banking activities,,

Types of banks in india:

👉Central Bank-A bank which is entrusted with the functions of guiding and regulating the banking system of a country is know as it's central bank , Reserve bank of india (RBI) Is the central bank  our country,

👉Commercial Bank:Commercial banks are banking institutions that  accepts deposit and grant short-term loans and advance to their customers,

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Type of commercial banks:

1. Public sector banks;These are banks where majority stake is held by the Government of india or Reserve Bank of india , Examples of public  Sector banks are state bank  of india, Corporation Bank of Baroda Dena bank etc,
2. Private sector bank - in case of private sector banks majority of share capital of the bank is held by private individuals for example , The  jammu and kasmir bank ltd , Bank of Rajsthan ltd , Development  credit bank ltd Lord krishna bank ltd, Bharat overseas bank ltd global trust bank vysya bank etc,
3. Foreign banks :These banks are registered and have their  headquarters in a foreign country but they operate their branches in our country .are  Hong kong and shanghai banking corporation (HSBC) CITIBANK  American express Bank standard & charted bank grindlay's Bank etc,
4. Development Bank:-Business often requires and l long  term capital for purchase of machinery and equipment for using latest  technology  or for expansive and modernization such financial  assistance is provide by Development Banks, They also undertake  other development measures like subscribing to the shares and debentures by companies ,
5. SPECIALIZED BANK -There are some banks , which  center to the requirements  and provide overall support for setting up business in specific area of activity , Export import bank (EXIM BANK) Small indusstries development bank of india (NABARD) ARE EXAMPLE such banks,,
6. Co-operative Banks :-people who come together to jointly  serve  their common interest often form a co-operative society under the co-operative societies Act, When a co-operative  societies engages itself in  banking business , its called a co-operative Bank,

Type of co-operative banks

 :

(1) Primary Credit societies

(2) Central co- operative banks

(3)State co-operative banks,

#typeofbanks

(1)Retail banking-

Banking in which bankig institutions deal directly  with consumers  rather than corporation , service osffered include saving and  current accounts mortgages personal loans , debit cards credit cards and  so forth , It also includes transfer  of money exchange of foreign currency and issue of traveller's cheques,

(2)Social banking :-Social  banking process caters to the development needs of the poor in sharp contrast with conventional commercial banking ,  Grameen Bank is the best example  of social banking , According  to founder of  Grameen bank Mr MUHAMMD YUNUS "The poor are like" "bonsi"  which could have grown into taller trees if given proper soil ,The  socirty has not given the poor a choice

(3)Wholesale banking :Provides banking services to large corporations  and  institutions  services are not  provided to individuals or small businesses,ING  is one of the wholesale banks in india,

(4)Universal banking :-Universal banking is a multi-purpose and multi- functional financial  supermarket ( a company offering a wide range of financial service  etc, stock insurance and real estate brokerage providing both banking  and financial service through a single window , in a nutshell universal  banking is a superstore for financial products under one  roof,

(5) Merchant Banking "-The merchant bankers are those financial intermediaries involved with  the activity of transferring captial funds to those borrowers who are interested in borrowing,

The activities of merchant banking in india are very vast in nature 

These include the following 

(a)The management of the customers securities,

(b)The management of the portfollo,

(c)The management of projects 

(d)The management of  underwriting of shares 

(6)Offshore Banking:-

An offshore bank is a bank located outside the country of residence of the depositor it has been estimated that 65% of the world hard currency is held offshore banks and that around 40% of world trade in goods is transacted through offshore finance  centrs,

(7)E-banking:- E-banking is a  generic  term for delivery of banking service  and products ,

(8)Mobile banking:- Mobile banking us used for performing balance checks account transactions payments etc via GPRS(GENERAL PACKET RADIO SERVICE) ENABLED MOBILE DEVICE,,,

#2-Different between banking and finance ?

Ans-Banking banking  the business of providing  financial  service to  consumes and business  houses, The basic services a bank provide are chequeling accounts , which can be used like money to make  payments  and purchase goods and services savings accounts and time deposits that can  be used  to save money for future use loan that  consumers and business people can use to purchase goods and services, and basic cash management services such as cheque encashment and  foreign currency exchange ,

Finance:-A branch of economics concerned with resource allocation  well as resource management , acquisition and investment simply  finance deals with matters related to money and the markets finance is also the strategical methods of determining if the funds of an  organization are being  used properly,

The financial system consists of consumers manufactures and distributors , These groups need money to purchase products and  services, One way of looking at finance is that it is getting the money to purchage goods and service,

#3-Describe role of Banking ?

Ans-Banks provide  funds for business as well as personal needs of  individuals , They play a significant role in the economy of a nation  following are The major functions of banks ,

*It encourages saving habit     most people and thereby makes funds  available for productive use,

*It acts as an intermediary between people having surplus money and  those requiring money for various business activities,

* It  facilitates  business transactions through receipts and payments  cheques instead of currency

it provides loans and advances to businessmen for short term and long term purposes,

it also in national development by providing  credit to farmers, small  scale industries and self employed development in the country 

it help in raising the standard of living pf people in genegar by  providing loans for purchase of consumer durable goods hourses automobile ,

#4, Explain briefly the financial instruments -cheque banker's cheque Demand draft Travellers cheque Money order postal order ?

Ans-Cheque :-A negotiable instrument drawn against deposited funds ,  to pay a specified amount of money to a specific person upon  demand examples include bills of exchange and draft ,

Banker's cheque :-Banker's cheque is another payment instrument  which is used by banks to settle payment obligations on begalf of  their customers, 

Demand Draft:-The  demand drft is a pre-paid negotiable instrument wherein the drawee bank undertakes to make payment in full when  the instrument draft is made payable on a specified on a specified branch of a bank at a  specified cente, In order to obtain  payment  the beneficiary has to  either present the instrument directly to the branch concerned or have it collected by this 'his/ her bank through the clearing mechanism,

Money  Order :- Money order service is offered by the department  of posts Government of india, The  money order enables an individual  to send remittances to a third party through the post office , it is a point  to point delivery  of funds ,  The originating post office collects  the full amount of remittance  also a commission (service change)

from the individual remitting the funds and sends the advice to the  destination post office , At the destination post office  the funds are  paid to the beneficiary , The money order can be sent as an ordinary  paper based payment advice or as a Telegrapgic money order,The  telegraphic money order is faster as the payment advices are sent  through telex or telegraph,

Postal order:-The postal order is another payment instrument of the department of posts, The postal order is issued  denomination -wise which can be encashed by the benificiary after due identification at  the post office on which it is drawn postal orders like the money ,  Orders are independent of the banking system , Both these instruments  are GIRO( GENERAL INTERBANK RECURING ORDER ) Payment and are credit  transactions as opposed to a cheque which is a debit payment mechanism,

#5, What are assets and liabilities  a banks ?

 Ans-  In general , the money a bank receivers as deposits from both individuals  and large companies becomes a banks liability , The bank  a liability, The bank receives assets in the form of the interest it charges on loans made to  governments business and private individuals,

• #Assets Loans and advances to RBI and administrations Loans and advances to credit institutions,

(1) Loans and advances to customers,

(2)Financial  assets held for trading ,

(3) Fixed income securities,

(4) Real estate assets and other assets 

LIABILITIES:-

(1)Amounts owed to RBI,

(2)Amounts owed to crdit institutions,

(3) Amounts owned to customers,

(4) Debts evidenced by certificates,

(5) Liabilities (other than deposits ) held for trading ,

(6) capital and reserves,

 #6, What money market capital in market ?

Ans-

Market Money

Money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities are traded,
The money market is better know as a place for large institutions and government  to manage their short -term cash needs, It is highly  liquid and can be turned over quickly at low cost and provides an  opportunity for  balancing the short term surplus funds of lenders and  the requirement of borrowers, Basically , it  provides short term requirement and development of funds , Money Market instruments  are those instruments , which has  participants of money market are regulated by RBI and SEBL,

#moneymarketinstrumentare,

• Call/Notice/Term money
• Repo/Reverse Repo
• Inter corporate deposit,8i
• Commercial paper
• Certificate of deposit,
• T- bills,
• Inte bank participation certificate,

Capital market

Capital market is where investment funds like bonds equities and  mortgages are traded, it is a market where companies government  and individuals raise long term funds , The capital market offers  both long term and funds  The capital market offers  both long  term and overnight funds , The financial  instruments that have short or medium term maturity  periods are defult in the money market whereas the financial instruments that have long maturity periods are dealt in the capital market,,

There are following types of financial instruments traded in capital market,

1. Equity  instrument,
2. Credit market instrument,
3.  insurance instrument,
4. Foreign exchange instruments,
5. Hybrid instruments,
6. Derivatives instrument,

#7,  List down and explain the instruments of money market and  capital ?
Ans-

Money Market instruments :

(1) Call/ Notice/ turn  money The call/ notice/ term money market is a market for trading very short liquid  financial assets that  are readily  convertible  into cash at low cost,  , The period of lending may be  for a period of 1 day which is know as call money  and between  2  days and 14  days which is know as notice money, Term money  refers  to borrowing /lending of funds  for period exceeding 14 days ,

(2)Repo/Revers Repo_ 

(3) Inter corporate deposit : It is an unsecured loan extended by one  corporate to another , The corporate having surplus funds would lend  to another corporate of funds in this market only  primary dealers are permitted , The borrowing under ICD is restriced to 50%  of  the Net owned funds and the minimum tenor of borrowing is for 7 days,

($) Commercial paper :- RBI  introduced commercial papers as a  money market instrument in the indian financial  market in 1990, i it is an unsecured money market instrument issued in the formof promissory  note, Corporates and primary dealers (Ds) and the  all - india financial  institutions (FLs)  that have been permitted to raise short term  resources by Reserve Bank of india are eligible to issue CP,