Banking structure questions and answers for bank recruitment

Banking structure questions and answers for bank recruitment

Q1. What is a bank?

Ans. Bank is a financial institute where we deposit the money. The bank accepts this money for the purpose of lending and repays it on demand.

Q2.What is the major functions of any bank?

Ans. Major Functions of bank are:-

- Accepting deposits from public or firm.
- Lending money to public.
- Transferring money from one place to another.
- Credit creation.
- Act as trustee.
- Keep valuables in safe custody.

Q3. In how many types you may categorize the bank in India?

Ans. We can categorize the banks into five categories :

- Central bank (RBI)
- Public sector banks
- Private sector banks
- Co-operative sector banks
- Development bank or financial institution

Q4. What are scheduled commercial banks?

Ans. Scheduled commercial banks are those banks in India which were included in the second schedule of Reserve Bank of India (RBI) Act, 1934.

Q5. In which year national housing bank (NHB) started its operation?

Ans. NATIONAL HOUSING BANK (NHB) started its operations in 1988.

Q6. Under which act were the State Bank of India and its subsidiaries nationalised?

Ans. The State Bank of India and its subsidiaries where nationalized under SBI Act, 1955.

Q7. What is non-scheduled bank?

Ans. Non –scheduled bank in India means a banking company as defined in clause (C) of section 5 of the BANKING REGULATION Act, 1949.

Q8. What are Co-operative banks?

Ans. Co-operative banks are organised under the provision of co-operative credit society’s law of state. The major beneficiary of this bank is agricultural sector.

Q9. Which is the first bank that was incorporated at the initiative of World Bank and in which year?

Ans. The Industrial Credit and Investment Corporation of India Limited (ICICI) in the year 1955.

Q10. How may development banks are there in India and name them?

Ans. There are six development banks are there in India. They are:
- ICICI
- IDBI
- SIDBI
- EXIM BANK
- NHB
- NABARD

Q11. In which year Indian Banks Association (IBA) was formed and initially with how many members?

Ans. IBA was formed in 26 September, 1946 with 22 members.

Q12. What is KYC?

Ans. KYC is the acronym for “know your customer”, which is termed for the process of proper identification of account holder.

Q13. What is CRAR?

Ans. The Reserve Bank of India had made a norm that every bank has to maintain an adequate amount of capital on continuous basis and this adequacy of capital is measured in terms of CAPITAL TO RISK-WEIGHTED ASSEST RATIO which is also known as CRAR.

Q14. What is the minimum amount of money that should be remitted through RTGS?

Ans. We can remit Rs 2,00,000/- minimum through RTGS.

Q15. How many centres of EFT are present in India?

Ans. There are 15 centres available for EFT in India at the moment.

Q16. Which technology is used by the banks for settlement of cheque?

Ans. For the settlement of cheque magnetic ink character recognition (MICR) technology is used by the banks.

Q17. How many types of electronic clearing service (ECS) are there?

Ans. There are two types of ECS used in banks. They are:-
- ECS-credit
- ECS-debit

Q18. Who insures the banks in India?

Ans. Deposit Insurance and Credit Guarantee Corporation (DICGC) insure the banks in India.

Q19. What is KCC and in which year was it introduced?

Ans. Acronym of KCC is Kisan Credit Card and it was introduced in 1998-99 which helps farmers to draw the cash for production need.

Q20. Which was the first Indian bank to get an ISO certification?

Ans. CANARA bank was first Indian bank that got an ISO certification.

Q21. What do you mean by IMPS?

Ans. IMPS stands for Immediate Payment Service. It is a mobile remittance service that allows a real-time fund transfer from one account to another through cell phone.

Q22. Which was the first Indian bank to set up internet kiosk?

Ans. ICICI was the first bank who had set up the internet kiosk in partnership with n-LOGUE communications.

Q23. Name the financial institution built by Industrial Development Bank of India (IDBI)?

Ans. The financial institutions built by IDBI are:-

- NATIONAL STOCK EXCHANGE OF INDIA (NSE)
- THE NATIONAL SECURITIES DEPOSITORY SERVICE LIMITED (NSDL)
- STOCK HOLDING CORPORATION OF INDIA (SHCIL)

Q24. According to Narasimham committee what is the minimum amount of money that is statutorily required by the NBFC’s for registration?

Ans. According to Narasimham committee NBFC’s require Rs.25,00,000 for registration.

Q25. Which committee had worked for the recapitalisation of Regional Rural Banks (RRB’s)?

Ans. K.C. CHAKARABARTY worked for the recapitalisation of RRB’s.

Q26. The authorized capital of NABARD in 2013 was raised up to what limit?

Ans. In the year 2013 the authorized capital of NABARD raised up to 20000 corers.

Q27. The BASEL COMMITEE was formed in which year?

Ans. The BASEL COMITTEE was formed at the end 1974.

Q28. Which bank comes under the category of APEX banks.

Ans. Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD) come under the category of APEX banks.

Q29. Which kind of operations are included in treasury operations?

Ans. The treasury operations include the following:-

- DEBT MARKET
- EQUITY MARKET
- MUTUAL FUNDS
- DERIVATIVES
- FOREX OPERATIONS
- TRADING

Q30. What do you mean by CASH CREDIT?

Ans. CASH CREDIT is the system formed by the banks which allows the borrower to draw amount up to the specified limit.

Q31. What do you understand by OVERDRAFT?

Ans. OVERDRAFT is the facility granted by bank to the customers of current account by which they draw the amount more than the credit balance in their account.

Q32. How many types of debit card do the banks provide to their customers in India?

Ans. The following are the types of debit cards provided by the banks in India are:-

- VISA CARD
- MAESTRO CARD
- MASTERCARD
- RUPAY CARD

Q33. Which bank is the settlement bank for CASH TREE?

Ans. BANK OF INDIA is the settlement bank in CASH TREE network.

Q34. In term of banking what do you mean by LABs?

Ans. LAB stands Local Area Banks in banking terms. It is associated with local markets and acts as host of financial services including savings, credit, remittances, insurance etc.

Q35. How many type of deposits does Indian banking deal with?

Ans. The Indian banking industries deal with the following types of deposits:-
- Term deposits
- Demand deposits
- Current deposits
- Savings deposits

Q36. Classify the business of banking?

Ans. Business of banking can be classified into four categories:-

- Retail banking business
- Wholesale banking business
- Treasury operations
- Other banking activities

Q37. What are the major products of the banking industry?

Ans. There are three major products in the banking industry:

- Deposit products
- Credit products
- Customized banking services

Q38. Classify the URBAN CO-OPERATIVE banks?

Ans. URBAN CO-OPERATIVE banks are classified into two categories:-

- Single urban co-operative banks
- Multi-state urban co-operative banks

Q39. Which bank was amalgamated into the ORIENTAL BANK OF COMMERCE and in which year?

Ans. In 2004 the GLOBAL TRUST BANK LIMITED (GTB) was amalgamated into ORIENTAL BANK OF COMMERCE.

Q40. Which bank launched e-banking lounge first time in India?

Ans. BANK OF MAHARASHTRA was the first bank that launched e-banking lounge in India.

Q41. Which Act allows the bank and financial institutions to auction the properties when borrower fails to repay the loans?

Ans. SARFAESI Act, 2002 allows the banks and financial institutions to auction the properties when borrowers fail to repay their loans.

The acronym for SARFAESI is “Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest”.

Q42. What do you mean by CASA deposits?

Ans. Deposit in CURRENT and SAVINGS account is known as CASA.

Q43. What do you mean by CIN and what specification does it contain?

Ans. It is a unique number known as CHALLAN IDENTIFICATION NUMBER (CIN) and it contain the following specifications:-

- 7 digit BRS code of branch where tax is deposited
- Date of deposit
- Serial number of challan

Q44. What does SACP stand for?

Ans. SACP is “Special Agricultural Credit Plan”.

Q45. Which system eliminates the physical movement of cheques and provides the efficient method for cheque clearing?

Ans. “CHEQUES TRUNCATION SYSTEM” (CTS) is the system that eliminates the physical movement of cheques and provides a secure and efficient method of cheque clearing.

Q46. In which year Credit Guarantee Corporation was formed?

Ans. Credit Guarantee Corporation was formed in 1971.

Q47. What is the old name of SYNDICATE BANK?

Ans. The old name of Syndicate Bank is CANARA INDUSTRIAL AND BANKING SYDICATE LIMITED.

Q48. What are the advances that the banks grant to their customers for their financial assistance?

Ans. There are three types of advances that bank grant to their customers for their financial assistance:-
- Cash credit
- Overdraft
- Discounting of bills

Q49. What is the significance of IFSC code?

Ans. The acronym for IFSC is “Indian Financial System Code”. It is an alpha numeric 11 digit codes which uniquely identifies a particular bank branch in India.

Q50. What is SWIFT?

Ans. The acronym for SWIFT is “The Society for Worldwide Interbank Financial Telecommunication. SWIFT provides a financial messaging network between banks and other financial institutions.