Bank interview

What is CRR

Cash Reserve Ratio is  percentage of customer's deposits with commercial banks that they need to deposit with RBI. Right now it's 4%.

What is SLR

Statutary Liquidity Ratio is the percentage of liabilities and time deposits that commercial banks need to keep with them in form of Cash, Gold or Government approved securities. Right now SLR is 22%

What is Bank rate

Rate at which RBI lends money to commercial banks without any security. 

What are open market operations

Buying and selling of government securities and bonds in open market by Government to maintain desired liquidity levels. 

What is Sensex and how it is calculated

Sensex is the index of top 30 stocks in Bomaby Stock Exchange(BSE)

Value of Sensex is calculated using "Free Float Market Capitalization" method.

Free float ratio is number of outstanding shares available for general public to trade.

Formula to calculate Sensex :-

What is CP ?

Commercial paper is a short term unsecured debt instrument.

What are various services provided by a commercial bank ?

LockersSafe custody of fundsAdvancing loansFund transfersPeriodic paymentsUnderwriting of sharesDealing in foreign exchangeDiscounting of loansOverdraft

What is PPF

Public Provident Fund is a tax saving investment for individuals.

Features :-
Number of deposits per year - 1 to 12Minimum deposit - Rs 500Interest received is tax freeInvestment is exempted under section 80(c)

What are various investments under section 80(C) of Income Tax act

Fixed deposit (5 years)PPFEquity mutual fundsELSSEPF and VPFNSCs (National Saving Certificate)ULIPsNPS (Pension plans)Life insurance

Minimum lock-in period for Tax saving Fixed Deposit

5 years

What are NPAs

NPA stands for Non-Performing Assets.

Bank gives loans and advances to it's customers. These loans and advances are bank's assets. When the customers don't repay back the bank's money they don't perform. Such assets are known as Non-Permoerming Assets.

What was the purpose of setting up NABARD 

NABARD is the apex institution for the development of farm sector , cottage industries and small scale industries in rural areas.

What are various functions of RBI

Government’s banker and performs banking functions for the central and the state governments. Bankers of banksMaintain liquidity in the economyRegulator of country's financial systemRegulates and facilitates foreign trade advisor to the Government of IndiaIssue currency notes

What is IRDA and what are it's functions

Insurance Regulatory And Development Authority (IRDA) is the sole authority to regulate the insurance industry in India , to ensure the growth of insurance industry and protect the interest of policy holders. 

What are Derivatives ?

In Derivative market the value of the instruments bought and sold is based on value of the underlying asset. The value of the instrument is ‘derived’ from the value of the underlying asset and hence it is known as Derivatives.

What is an Option in derivative market ?

An Option give right to Option Holder to buy or sell a commodity during a certain period of time or on a specific date.

What is Call option and Put option ?

Call option - An option which gives right to the Option Holder to buy a certain stock at specified time and specified date

Put option - An option which gives right to the Option Holder to sell a certain stock at specified time and specified date

What is GDP ?

Gross Domestic Product is the sum of all the goods and services produced within physical borders of a country in within a specific period of time. 

What is GNP ?

GNP = GDP + Income of residents overseas -Income of Foreigners within the borders of domestic economy

What is Monetary Policy

Policy by which a central authority attempts to control liquidity and interest aimed high growh rate and price stability.

What is Fiscal policy

Government revenue generation and spending policies that impact the macro economy.

What is Fiscal deficit

Excess of government expenditure over revenue

What is DeMat account 

It is the process of converting the physical share certificates into equivalent number of electronic holdings

What is RuPay card

RuPay is India’s own card payment system launched by National Payments Corporation of India (NPCI)

Bull and Bear market

When investors expect prices to rise, it's known as Bull market.

When investors expect prices to fall, it's known as Bear market.

What is SWIFT

Financial messaging network which exchanges messages between banks and financial institutions

What is Service Tax

Tax levied on providing services in India, Rate is 14%  + 0.36% for Education Cess

What is Mutual Fund ? What is safest type of fund ?

Mutual Fund is a pool of fund where investors invests their money for a common objective.

Benefits of Mutual funds
Exempted under section 80(C)
Managed by experts

Index funds are safest because money is invested in all index stocks. The rise or fall of value align with index.

What is GST

Goods and Services Tax, desision on this tax is pending. GST is going to replace all indirect taxes.