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Team Admin :- PO Interview Preparation Group

Questions were asked on 13/01/2015 : on Discussion Forum


121. if a bank doesnt follow priority sector lending toh kya penalties hai ??
122.Role of gdp in indian economy ??
123. Problems of rural banking and solutions of it
124. names of negotiable inst.
125. banks me present me jo NPAs h unhe kaise reduce kiya ja sakta h
126. all comm. banks , rrbs, are included in Fin. inclusion then what is the need of payment bank
127 GDR
128 SDR
129 Wats the percentage of loan distribution among priority sector
130 Total n. Of psb,private bank,foreign bnk n rrbs?
131 NDTL
132 what is NRE A/C ,NRO A/C ,FCNR A/C ?
133 kiosk banking example can be ATM ?
134 What is CAD ?
135. What is MUTUAL FUND, DEBENTURES, CHIT FUND ?
136. what is aadhar card and benefits in banking ?
137. what is cpi , wpi ? Explain and give proper difference.
138. Why CPI is a key indicator for inflation ?
139. Can we transfer in abroad via NEFT or RTGS ? If not, then by which service we can do that ?
140. Difference between FCNR A/C and EEFC A/C ???
141. Why should bank consider debt equity structure of a company before loaning?
142. How important is CASA portfolio for the bank?
143. What is Debit Card ?
144. What is Credit Card ?
145. What is Smart Card ?
146. Basic Difference BTW bal sheet of bank n company ?
147. What is Virtual Banking ?
148. What is Universal Banking ?
149. What do you understand by Underwriting ?
150. What is Settlement ?
151. Repurchase Agreement ?
152. Real Interest Rate ?
153. What is Rate of Return ?
154. What is Priority Sector Advances ?
155. What is Plastic Money ?
156. What is Personal Identification Number (PIN) ?
157. What is MIBOR ?
158. What is LIBOR ?
159. What is Initial Public Offering (IPO) ?
160. What is Hedge ?

Check answers : -
Team Admin :- PO Interview Preparation Group

121. if a bank doesnt follow priority sector lending toh kya penalties hai ??
Ans : SECTION II PENALTIES FOR NON-ACHIEVEMENT OF PRIORITY SECTOR LENDING TARGET /
SUBTARGETS
1. Domestic scheduled commercial banks Contribution by banks to Rural Infrastructure
Development Fund (RIDF): 9
1.1 Domestic scheduled commercial banks having shortfall in lending to priority sector target (40
per cent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is
higher) and / or agriculture target (18 per cent of ANBC or credit equivalent amount of OffBalance
Sheet Exposure, whichever is higher) shall be allocated amounts for contribution to
the Rural Infrastructure Development Fund (RIDF) established with NABARD. The concerned
banks will be called upon by NABARD, on receiving demands from various State
Governments, to contribute to RIDF.
1.2 The corpus of a particular tranche of RIDF is decided by Government of India every year. Fifty
per cent of the corpus shall be allocated among the domestic commercial banks having
shortfall in lending to priority sector target of 40 per cent of ANBC or credit equivalent amount
of Off-Balance Sheet Exposure, whichever is higher, on a pro-rata basis, and fifty per cent of
the corpus shall be allocated among the banks having shortfall in lending to agriculture target
of 18 per cent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure,
whichever is higher, on a pro-rata basis. The amount of contribution by banks to a particular
tranche of RIDF will be decided in the beginning of the financial year.
1.3 The interest rates on banks contribution to
122.Role of gdp in indian economy ?
Ans : A country's gdp is the indicator of a country's growth...it tells abt their economic condition..whether it is
developed or developing...
123. Problems of rural banking and solutions of it ?
Ans : Lack of technology...low participation of villagers... (Mostly the villagers go to moneylenders who offers
higher interests...)..agri loan waivers..
124. names of negotiable instruments ?
Ans : Cheque,promissory notes,bank draft,commercial paper,certificate of deposit,treasury bills,railway receipts
125. banks me present me jo NPAs h unhe kaise reduce kiya ja sakta hai ?
Ans : precaution is better than cure , can be reduced by lending only after getting colletral, proper documt
verification whether the assets being pledged is in the name of customer or nt or if any liabilities towards that
assets.
2. proper inquiry whether the loan amount is using for the same purposes for which it has been extainded. to
eliminate willful defaulters.
3. stickt enforcement of sarfaisi act or reducing political interferences
4. while making clean loans credit report most be accesed from cibil
126. all comm. banks , rrbs, are included in Fin. inclusion then what is the need of payment bank ?
Ans : Bcoz dat banks hv to complete basel norms...but they are lacking funds due to increasing npa....
127 What is GDR ?
Ans : GDRs r financial instruments issued with an objective to raise money from European investors(ie issued

in european market)
128 What is SDR ?
Ans : SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries
official reserves. Its value is based on a basket of four key international currencies, and SDRs can be
exchanged for freely usable currencies
OR sdr is international reserve fund kept under the custody of imf. it shows the drawing right of its member
states. the value of sdr is determined as the avg value of four major currencies usd, pounds, yen & euro
129 Whats the percentage of loan distribution among priority sector ?
Ans : banks with more than 20 branches = 40% ( in which agriculture = 18% advance to weaker secn =
10%)
less than 20 branches = 32%
130 Total no. of psb,private bank,foreign bnk n rrbs?
Ans : PSB: 27(21+SBI+SB ASSOCIATES)
Private:23
19

Rrbs:56

Foreign:41

Nationalised

131 What is NDTL?


Ans : NDTL stands for net demand & time liabilities.. these r d liablts of d bank..
Demand liabilities: savings & current deposits..
Time liabilts: fixed & recurring deposits..!
OR - Total deposits of the customer with the bank. Ndtl has 2 types of deposits --- demand deposits( which
are payable on demand) time deposits ( which are payable on the date of maturity). CASA is demand and
RAFA is time deposits. These are the liabilities of the bank
132 what is NRE A/C ,NRO A/C ,FCNR A/C ?
Ans : NRO- when a resident becomes Non resident, his domestic rupee a/c gets converted into Non residential
ordinary a/c...can be opened as both CASA & RAFA..Pricipal- non repartible, intrest- patriable
133 kiosk banking example can be ATM ?
Ans : kiosk means a small store, in case of banking kiosk means an unmaned store where customers can
widraw money, deposit money,get their cheque/dd printed, cheque depisit etc. atm can b an example as many
atms nwadays accepting cash too
134 What is CAD ?
Ans : Current account deficit . its is the difference between the total expenditure and total income of the
country.
135. What is MUTUAL FUND, DEBENTURES, CHIT FUND ?
Ans : mutual fund is an investment programme that is made up of a pool of funds collected from many
investors for the purpose of investing in securities such as stocks, bonds, money market instruments and
similar assets (ie diversified portfolio) and is managed by experts.
A type of debt instrument that is not secured by physical assets or collateral. Debentures are backed only by
the general creditworthiness and reputation of the issuer..In simple language we can say it's a loan taken from
public by corporations and carries fixed return(ie interest) unlike shares
Chit Fund is a saving scheme practiced in India. It originated 1000s of years ago. It was started as informal

association of traders and households with in communities. It enables poor people to convert small savings
into lump sums. Chit fund transaction is an agreement with a specified number of persons that every one of
them shall subscribe a certain sum of money over regular fixed intervals,
136. what is aadhar card and benefits in banking ?
Ans : Aadhaar is a 12-digit unique identification number issued by the Indian government to every individual
resident of India. The Aadhaar project was initiated as an attempt towards having a single, unique
identification document or number that would capture all the details, including demographic and biometric
information, of every resident Indian individual. It will also serve as the basis for Know Your Customer (KYC)
norms used by banks
OR the 12-digit adhar card carries biomatric info of the individual it means geting forged info or getting
multiple such cards is almost impossible this quality makes it very atractive in bankibg and can be easily
accepted under kyc norms as both id proof aswell as adress proof. if the mentioned adress is changed just a
self attestation form having current adress will do after puting signture or thumb impression of the customer.
also bnks urging evryone to link his existing a/c to adhar so that DBT can be availed
137. what is cpi , wpi ? Explain and give proper difference.
Ans : yes indexes for measuring inflation. cpi measures price rise of goods n services at consumer level where
even service charge levied on consumer is included.
while wpi measers the same at wholesale level where many taxes or charges levied on consumers r excluded.
untill 2014 rbi used wpi bt nw it moved towards cpi
OR Wpi s wholesale price index used to measure price chnges in d guds bought by wholesellers from
producers while cpi s consumer price index which measures the price chnge in d guds bought by ultimate
consumers ....both measure inflation ie price rise
138. Why CPI is a key indicator for inflation ?
Ans : cause it gives actual statistics of wat actually consumer bears while making purchases. as in wpi service
tax , sale tax etc r excluded which makes a huge difrence b/w consumer price n price at wholesale price level
139. Can we transfer in abroad via NEFT or RTGS ? If not, then by which service we can do that ?
Ans : no..we can use wire transfer for such purpose. Wire transfers allow people in different geographic
locations to easily transfer money to locales and financial institutions around the globe. For providing the
service, banks will collect a fee, sometimes based upon the size of the transfer being made ..
140. Difference between FCNR A/C and EEFC A/C ???
Ans : Exchange Earners' Foreign Currency Account (EEFC) is an account maintained in foreign currency with
an Authorised Dealer i.e. a bank dealing in foreign exchange. It is a facility provided to the foreign exchange
earners, including exporters, to credit 100 per cent of their foreign exchange earnings to the account, so that
the account holders do not have to convert foreign exchange into Rupees and vice versa, thereby minimizing
the transaction costs.
fcnr opened by NRI
EEFC-- All categories of foreign exchange earners, such as individuals, companies, etc. who are resident in
India, may open EEFC accounts
141. Why should bank consider debt equity structure of a company before loaning?
Ans : To check its soundness for repayments plus companies act puts limitations on the borrowing of the
company linked to equity and reserves so the bank must ensure that the aggregate borrowings must be within
the limits.

142. How important is CASA portfolio for the bank?


Ans : CASA means current account and saving account. The deposits in these accounts influence the most on
banks profitability. The bank gives a very modest rate of interest on saving accounts whereas no interest is
paid by the bank on current accounts. Therefore banks are tried hard to deposit more and more money in
these accounts by the public so that banks earn spread ie profits by making loans and advances.
OR CASA r low cost deposits , thus in order to be competitive, banks should try to garner as much CASA as
possible coz by doing so they can control the cost of raising deposits and hence can lend at more competitive
rates.
143. What is Debit Card ?
Ans : Debit card is a prepaid card.it is a payment gateway through which cutomer can do all transactions if
he/she has balance in thier account.
144. What is Credit Card ?
Ans : CC is issued by bank/non bank entity through which we can withdraw money frm atm,used at POS for
shopping etc ..... also there is overdraft facility 4 customers.
145. What is Smart Card ?
Ans : It is an intigrated circuit card(iic)...also known as electric bag...used for transaction purpose....used for
shoping......money can load through atm and mobile....
146. Basic Difference BTW bal sheet of bank n company ?
Ans : in banks' b/s assets r loans granted & liabilties r deposits of public and businesses while in case of
Co...under assets heads- all fixed & current assets,under liabilties head- loans from bank + all other currnt &
fixed liabilties + its own capital
147. What is Virtual Banking ?
Ans : to deliver banking services primarily through Internet or other electronic delivery channels is called
virtual banking
OR internet based banking,,thus eliminating the need to walk to bank premises..eg ATM, Net banking
148. What is Universal Banking ?
Ans : all banking services say retail , wholesale, marchant, wealth management etc under one roof . icici bank
is said to be the first bank to start universal banking in india
149. What do you understand by Underwriting ?
Ans : is an agreement by the underwriter to buy on a fixed date and at a fixed rate, the unsubscribed portion
of shares or debentures or other issues. Underwriter gets commission for this agreement.
150. What is Settlement ?
Ans : Conclusion of a securities transaction when a customer pays a broker/dealer for securities purchased or
delivered, securities sold, and receive from the broker the proceeds of a sale.
151. Repurchase Agreement ?
Ans : An arrangement in which a security is sold and later bought back at an agreed price and time.
152. Real Interest Rate ?

Ans : nominal interest rate inflation rate = Real Interest Rate.....An interest rate that has been adjusted to
remove the effects of inflation to reflect the real cost of funds to the borrower, and the real yield to the lender.
The real interest rate of an investment is calculated as the amount by which the nominal interest rate is higher
than the inflation rate.
153. What is Rate of Return ?
Ans : (net profit / investment made) * 100
154. What is Priority Sector Advances ?
Ans : Lending to certain specified sectors identified as priority sectors by RBI viz MSME, agriculture, SHGs,
Rural credit, retail traders..banks hv to lend a certain fixed % of their lending to these. As per guidlines it's
40%
155. What is Plastic Money ?
Ans : These are basically plastic cards that are used for buying goods and services on credit within specified
limits and according to term and conditions of the bank. Eg --- debit ,credit and smart card
OR - collective term for all types of bank cards viz credit cards, debit cards, smart cards, etc.
156. What is Personal Identification Number (PIN) ?
Ans : It is a 4 digit confidential numeric number with the help of it a customer can withdraw money from the
ATM's.
157. What is MIBOR ?
Ans : MIBOR ie Mumbai Interbank Offer Rate is the interest rate at which bank borrow funds from 1 another in
indian interbank market. The MIBOR is calculated everyday by NSE as a weighted average of lending rates of
a group of banks.
158. What is LIBOR ?
Ans : The LIBOR is the world's most widely used benchmark for short-term interest rates. It's important
because it is the rate at which the world's most preferred borrowers are able to borrow money.
OR london interbank offered rate is the average interest rate estimated by leading banks in London that they
would be paying if they borrow from other banks.
159. What is Initial Public Offering (IPO) ?
Ans : when any company issues its shares for the 1st time in stock market to raise capital, its c/d
IPO..thereafter it becomes FPO(Further or follow on public offering)
160. What is Hedge ?
Ans : It is a strategy used to minimize the risk of a particular investment and at the same time maximize the
returns on the investment

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