Bank Interview Questions

Get Top 50 Banking Interview Questions from this page!!! Here on this single page, you will get questions mostly asked at the time of Bank Interview with their answers. Your selection in Bank requires right academic qualifications, aptitude, sincerity, dedication and experience.

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Banking is a very lucrative field to make career in. Thousands of fresh graduates as well as experienced professional all over the world prefer to become Banker. Banking career has its own charm and style just like any other equally important career line

Bank Interview Questions

Top 15 Banking Interview Questions & Answers:

Question 1: Brief me about yourself?

Answer: It is the first fundamental question that every interviewer asks a candidate to start the conversation and know about the person. So, always be positive and introduce yourself starting with your name, qualification and all the other required information that is important for an interviewer to know.  Just complete it within 2 minutes so that it should not be extended as a boring conversation.

Question 2:  Why do you want to join the banking sector?

Answer:  In this question, be logical and answer it by telling why banking sectors have influenced people with all the facts and figures, ready as to why the banking sector is the fastest-growing sector. Do not start by telling that you want to have a stable career or some personal view.  Just make it well versed which can form a correct opinion of your answer.

Question 3: What are the types of accounts in a bank?

Answer:  Be straight forward and start your answer by telling the information which can match the question asked by an Interviewer. The types of accounts in banks are:

Checking Account: You can access the account as saving account but, unlike saving account, you cannot earn interest on this account. The benefit of opening a checking account in a bank is there is no limit for withdrawal.

Money Market Account: This account gives both the benefit of savings account and checking accounts.  You can withdraw the amount and yet you can earn higher interest on it.  This type of account can be opened with a minimum balance.

Certificate of Deposit Account (CD): By the opening of such account you have to deposit your money for the fixed period like five years or seven years, and you will earn the interest on it. The rate of interest will be decided by the bank, and you cannot withdraw the funds until the fixed period expires.

Saving Account: You can save your money in such account and also earn interest on it.  The number of withdrawal is limited and need to maintain the minimum amount balance in the account to remain active.

Question 4: What are the necessary documents a person requires to open an account in a bank?

Answer: As per the RBI advised banks to follow the Know Your Customer (KYC) guidelines where the bank obtains some personal information of the account holder.  The primary document that is needed to open an account are photographs, proof of identity proof like Aadhar card or Pan Card etc., and address proof as well.

Question 5:  What are the types of Commercial Banks?

Answer: The types of Commercial Banks are:

Retail or Consuming Bank: – It is small to the midsize branch that directly deals with consumer’s transaction rather than corporate or other banks.

Corporate or business banking: – Corporate banking deals with cash management, underwriting, financing and issuing of stocks and bonds.

Non- traditional Options: – There are many non-banks entities that offer financial services like that of the bank. The entities include credit card companies, credit card report agencies and credit card issuers.

Securities and Investment Banking: – Investment banking manages portfolios of financial assets, commodity and currency, corporate finance, fixed income, debt and equity writing etc.

Question 6:  What is the annual percentage rate (APR)?

Answer:  APR is known as the Annual percentage rate. It is a charge or interest that the bank imposes on their customers for using their services like loans, credit cards etc.  The interest is calculated annually.

Question 7:  What is Amortization and negative amortization?

Answer:  Amortization refers to the repayment of the loan by instalment to cover principal amount with interest whereas, negative amortization is when the repayment of the loan is less than the loans accumulated interest, then negative amortization takes places.

Question 8:  What is the debt to income ratio?

Answer:  Debt to income ratio is calculated by dividing a loan applicant’s total debt payment by his gross income.

Question 9: What is loan grading?

Answer:  Loan grading is the classification of the loan based on various risks and parameters like repayment risk, borrowers credit history etc.  The system places a loan on one to six categories, based on the stability and risk associated with the loan.

Question 10: What do you mean by Co-Maker?

Answer:  A person who signs a note to guarantee the payment of the loan on behalf of the main loan applicant’s is known as Co-maker or signer.

Question 11: What is the line of credit?

Answer:  Line of credit is an agreement between the bank and a borrower, to provide a certain amount of loans on borrower’s demand. The borrower can withdraw the amount at any moment and pay the interest only on the amount withdraws.

Question 12:  How banks earn a profit?

Answer:  The bank earns profit in various ways:

• Accepting deposit
• Banking Value chain
• Interest spread
• Providing funds to borrowers on interest
• Additional charges on services like checking account maintenance, online bill payment etc.

Question 13: What is the payroll card?

Answer:  Payroll cards are types of smart cards issued by banks to facilitate salary payments between employer and employees.  Through payroll card, the employer can load salary payments onto an employee’s smart card, and employee can withdraw the salary even though if he or she doesn’t have an account in the bank.

Question 14: What is the card-based payment?

Answer:  There are two types of card payments:

• Credit Card Payment
• Debit Card Payment

Question 15:  What is a Payday loan?

Answer: A Payday loan refers to a small amount and a short term loan available at the high-interest rate.

Question 16: What is a charge off?

Answer: Charge off is a declaration by a lender to a borrower for non- payment of the remaining amount when borrower badly falls into debt. The unpaid amount is settled as a bad debt.

Excerpts From Interview:

Interview 1: Questions asked to B.M.M qualified candidate in SBI Interview

Group Discussion:

“Capital Punishment Should be banned”

Personal Interview:

• Tell me about yourself. Why did you choose this career?
• Tell us about your education?
• When did you decide on banking career?
• Aren’t you over qualified for this position? What is your greatest strength?
• What is your weakness?

Interview 2: Questions asked to B. Tech qualified candidate in SBI Interview

Group Discussion:

“Beauty Contests degrade womanhood”

Personal Interview:

• What have you been doing after graduation?
• Why are you leaving your current position? ( for working professionals)
• What other career options do you have?
• What goals do you have in your career?
• How do you plan to achieve these goals?

Interview 3: Questions asked to Bachelor’s in Finance qualified candidate in SBI Interview

Group Discussion:

“If you are not part of the solution, you are part of the problem.”

Personal Interview:

• What is a Bank?
• Why do you want to work in the Banking industry?
• What do you know about our company? (Should have an idea about important products from various banks, tag lines etc…)
• Why are you interested in our company?
• Why don’t you join some private company? What is your long-term objective?
• Where do you see yourself, five years from now?

Interview 4: Questions asked to B.Sc. qualified candidate in SBI Interview

Group Discussion:

“Speculation is an art of Life”

Personal Interview:

• How will your professional knowledge be helpful in the Banking career?
• Do you have any plans for further education?
• Do you have any actual work experience?
• Do you have any location preferences?
• Will you relocate?
• Who is your role model?
• What are your short-term goals?

Interview Questions based on recent Interviews

Following are the questions and answers, which asked in some bank’s interviews. These questions are based on experience of interview crackers. So you should check it out and prepare how you have you have to answer these questions.

Q 1: Tell me something big that was in news 4 days ago. (SBI PO 2018)

Ans: I told him about the merger of BOB with Dena bank and Vijya Bank. And one more news that Aadhar is not mandatory now for bank accounts.

Q 2: You graduated last year and this year you cleared SBI PO mains, how? (SBI PO 2018)

Ans: I had maths as my graduation subject and somehow my reasoning was decent, so I tried to make them my strong point while preparing.

Q 3: Suppose I am a farmer and I have a 5-acre land, I come to you to ask for a loan, and will you give me? (IBPS PO 2017)

Ans: The candidate was not sure and he replied: Sir, I am not really sure, there might be some criteria or maybe institutions like NABARD for that, but yes Sir, commercial banks do give loans to farmers.

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Q 4: You have done graduation in Maths, tell us top 3 mathematicians of India. (IBPS PO 2017)

Ans: Aryabhatta, Bramhgupta, S. Ramanujan

Q 5: What is SIDBI? (IBPS RRB PO 2018)

Ans: Small Industries Development Bank of India (SIDBI) is a financial institution which is headquartered in Lucknow, India.

Q 6: What is Disinvestment? (IBPS RRB IT Officer Scale-II 2018)

Ans: Disinvestment means to sell off certain assets such as a manufacturing plant, a division or subsidiary, or product line.

Q 7: what is PCA? (RRB General Banking Officer (Scale II) 2017)

Ans: The Reserve Bank has specified certain regulatory trigger points, as a part of prompt corrective action (PCA) Framework, in terms of three parameters, i.e. capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return on Assets (RoA).

Q 8: So what percent of indian population is in agri. (IDBI PO PGDBF 2017)

Ans: 70-80%…(a wild guess)

Q 9: Why Do We Open A Bank Account? (IDBI PO PGDBF 2017)

Ans: The basic reason is to keep the money at a safe place. Banks also provide interest so extra earnings also.

Q 10: Tell me what is e-NAM? (IDBI PGDBF PO 2018)

Ans: The portal deals in all such information which includes pricing and the arrival related data on different agricultural produce, sell and buy related offers as well as provisions pertaining to dealing with such offers made.

Mostly Asked Banking Interview Questions

All Govt. Banks asked these questions in an Interview, so candidates should have to prepare for every bank interview before appearing & make an impressive answer in their mind. If you will prepare by these interview questions, then you will give the answer confidently:

Que-1. Tell me something about yourself.

Answer:- It will be the first question of the interview. In which, the candidate should give limited answers to cover your family background, education, job experience, etc.

Que-2. What is your father’s profession?

Answer:-It is mostly asking questions of the Bank interview. In which, the interviewer wants to know about your father’s profession knowledge. Minimum 2-3 questions will be asked which are related to your father’s profession. So the candidates should prepare enough for these questions.

Que-3. Some Banking Terms Questions.

Answer:- The Interviewer asks some banking terms to know your knowledge about banks.

Que-4. Current News Questions.

Answer:-At the time of Interview, Interviewer asks current news to know your interest in country/ worlds.

Que-5. Why Bank Jobs?

Answer:-It is the most important question. Your selection depends on the answer of this question. So you should prepare for it & not give a bad effect on the interviewer.

Que-6. What are your strengths and Weaknesses?

Answer:–This is again a very commonly asked question. The Interviewer here wants to analyze how much you know about yourself.

Strengths:

You should mention your strengths that are beneficial for them. For example, It should not be like “I am a very good cricket Player”, Rather you should focus on the strengths that are related to that job.

Weaknesses:

You should not say that you do not have any Weakness. It shows that either you are Overconfident or have not assessed yourself and don’t want to talk about it.

Que-7 Where do you see yourself after five years from now?

Answer:-Here The interviewer wants to know your knowledge about career path in the job and what is your level of commitment to the job they are offering.

Que-8 Why did you choose to work in a bank?

Answer:-These are very common questions and are asked to almost 90% of the candidates. Here The interviewer wants to know your level of willingness of working a in a bank.

Question 9: What are the basic documents a person requires to open an account?

Answer: The RBI has advised banks to follow the Know Your Customer (KYC) guidelines where some personal information of the account holder is obtained by the bank. This information includes: – photograph, proof of identity and proof of address. In 2013, AADHAR cards and MNREGA cards are included in KYC papers. Without these documents a person can’t open his account.

Key points:-

• The interviewer might ask whether you have a bank account or not.
• It is preferable to have an account and to know about the process because it will only help you if such questions come up.

Question10: Tell us something about the 27th or latest public sector bank in India.

Answer: The 27th public sector bank in India is Bhartiya Mahila Bank. It was created by Finance Bill 2012. The first BMB was opened in Mumbai on 19th November 2013 on the 94th birth anniversary of Indira Gandhi. India is the third country in the world to have a bank especially for women after Pakistan and Tanzania.

• • Tagline- “women empowerment economically”.

• • Head- Usha Anantha Subramanayam

• • The bank allows deposit from everyone, but lending will be focused for women.

• • This bank is very important because it is the latest and 27th PSB of India. So, try to know every basic point about BMB.

• • Initial capital of Rs. 1000 crore

• Similarly, if there has been some other initiative in that year, you should be well aware of it.

Question11: What do you understand by the GDP of the country?

Answer: The final value of all the goods and services produced under the geographical area of a country is the Gross Domestic Product of that country. GDP is calculated at consumption, investment and exports and imports are subtracted from the sum of these three.

Question12: Who are the Bharat Ratna awardees, 2014?

Answer: Mr. Sachin Tendulkar and Mr.C.N.R rao are the two recent awardees of Bharat Ratna award. Both of them are the 42nd and 43rd recipients of the award.

Question13: What is a Non -banking Financial Company (NBFC)?

Answer: A NBFC is a company registered under the companies act, 1956 which is involved in the business of loans, shares/stocks, etc. Non-banking financial companies are financial institutions that provide banking services, but do not hold a banking license.

These institutions are not allowed to take deposits from the public. NBFCs do offer all sorts of banking services, such as loans and credit facilities, retirement planning, money markets, underwriting, and merger activities.

Question 14: What is the difference between nationalized banks and private banks?

Answer: A nationalized bank is owned by the govt. of that country and is also known as Public Sector Bank whereas a private sector bank is owned by an independent individual or company.

Question 15: What are the Non Performing assets of a company?

Answer: A NPA is an obligation payable to the bank which has not been made or the interest and principal amount has not been paid on the due time. NPA is the loan or credit provided by the bank to its customers which could not be recovered in due time. NPA is also known as “bad debts”.

Question 16: What are the various risks that banks face?

Answer: There are mainly three types of risks faced by banks:-

• Credit Risk: – loan or NPA.
• Market Risk: – Money invested in the market.
• Operational risk: – Day-to-Day working risks.

Question17: What do you mean by term “CASA” related to bank?

Answer: CASA stands for Current Account Savings Account. The CASA ratio shows how much deposit a bank has in the form of current and saving account deposits in the total deposit. A higher CASA ratio means better operating efficiency of the bank because on current account there is no interest payable whereas on savings account a tiny 3.5% interest is payable by the bank. CASA ratio shows how much of the deposit of the bank comes from the current and savings deposit.

Question18: What is the difference between cheque and demand draft?

Answer: Cheque is a negotiable instrument which is paid to the bearer but a demand draft is a negotiable instrument always payable on order.

Question 19: What are the parts of banks’ capital?

Answer: Bank has following parts of capital:-

• Tier 1 capital: – Paid up capital (core capital) + Reserves (owners or promoters’ fund)
• Tier 2 capital: – Secondary Capital (borrowed funds) + general loss reserves + subordinated term debts + undisclosed reserves (can’t be maintained in India)
• Tier 3 capital: – Same as tier 2 capital but with a higher amount in order to face the market risks of the bank.

Question 20: Tell us something about BSBDA.

Answer: BSBDA stands for Basic Savings Bank deposit account. BSBDA is the new name for “no-frill accounts” under which anyone can open a bank account with even zero balance in it or “zero balance account”. This BSBDA is aimed at providing banking facilities to weaker section of the society and improve financial inclusion.

Question 21: What is the meaning of “base rate”?

Answer: Base Rate is the minimum rate of interest which a bank has to charge from its customers and a bank can’t sanction loan on a rate below the base rate. Banks may choose any benchmark to decide on the base rate. The exceptions of base rate are:-

• Agriculture loans
• sponsored schemes
• Staff loans
• Only under the above cases, bank can lend below base rate.
• Only under the above cases, bank can lend below base rate.

Question 22: We hear regularly that all bank branches are turning CBS. What is CBS?

Answer: CBS stands for CORE banking solutions under which the branches of the banks are interconnected with each other through intranet with a central database server. The CORE word in CBS stands for Centralized Online Realtime Exchange.

Question 23: What is Para Banking?

Answer: Para Banking includes all the services provided by banks apart from day to day banking. For example: – Debit cards, Credit cards, Life Insurance products, Cash Management services etc.

Question 24: What are the components of the monetary policy of RBI?

Answer: The components of monetary policy include CRR, Repo rate, reverse repo rate, SLR, MSF and Bank Rate.

Question 25: What is priority sector credit?

Answer: All Indian banks and foreign banks (which have more than 20 branches in India) are required give 40% of their credit to priority sector out of which 18% is for agriculture. In case of Regional Rural Banks, 60% credit is to be given to priority sector.

Question 26: What is the difference between Micro finance and micro credit?

Answer: Micro credit is giving a small amount of loan to the customers whereas Micro Finance is a wide term. It includes small loan + training on financial matters. In other words, Micro finance= Microcredit + Financial Literacy.

Question 27: What is financial inclusion?

Answer: Financial inclusion is the availability of banking services at a affordable cost in order to include the weaker section of the society in the banking system.

Question28: What are the steps taken by banks to promote financial inclusion?

Answer:

1. Publicity of banks so that more and more people open the accounts.
2. BSBDA so that poor people can also open their account.
3. People with agriculture land are being provided with Kisan Credit Card.
4. General Purpose Credit card provided to people with no agricultural land where maximum limit of withdrawal is Rs.15,000 and rate of interest is 4%.
5. Ultra small banking and banking correspondents.

CRISIL has made an index to calculate financial inclusion named as “CRISIL INCLUSIX” and in June 2013, there was 40% financial inclusion as per the index.

Question29: What is REPO rate and reverse REPO rate?

Answer: Repo rate is the rate at which banks borrow from RBI during shortage of funds. This is a short term loan provided for upto 90 days by selling securities to RBI and receiving money in lieu of it.

Reverse repo rate is the rate at which banks deposit their excess liquidity with the RBI. In other words, the rate at which RBI borrows from banks by selling securities in order to control excess liquidity in the market is reverse repo rate.

Question30: What is Bank rate?

Answer: It is same as repo rate but here the time period is for more than 90 days.

Question31: What is Cash Reserve Ratio (CRR)?

Answer: CRR is the part of Net Demand and Time Liabilities (NDTL) or cash of the bank deposited with the RBI. A higher CRR makes loans expensive as liquidity is controlled by RBI. NDTL is the deposits of the customers with the bank.

Question 32: What is Statutory Liquidity Ratio (SLR)?

Answer: SLR is the amount of NDTL which a bank needs to maintain in the form of cash, gold or govt. securities before providing credit to its customers. Through SLR, RBI makes sure that bank always have a reserve amount out of their deposits to meet any future contingencies

Question33: What is Marginal Standing facility (MSF)?

Answer: In MSF, banks borrow money from RBI for upto 24 hours. MSF is always 1% above the repo rate and banks can draw only upto 25 of their NDTL from RBI.

Question34: What is Term Repo?

Answer: Under term repo, RBI lends to banks through auction of funds. The minimum interest charged has to be above the repo rate and there is no limit for maximum interest rate because auction is made on the rate of interest.

Question35: What is white label ATM?

Answer: It refers to ATMs owned by corporate or private operators seeking to earn a commission by banks for transactions performed by their customers. For ex:- INDICASH by TATA group.

Question36: What is brown label ATM?

Answer: It refers to the ATMs where investment, installation and maintenance is by a private operator but the license and branding is by a commercial bank.

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Question37: Tell us something about NABARD and its functions.

Answer: NABARD was established by an act of Parliament on 12 July 1976 as National Bank for Agricultural and Rural Development. It is the apex bank to provide rural credit and monitor the RRBs. The main functions of NABARD are:-

• Provide refinance to RRBs and other banks in rural areas for lending.
• Acts as a subsidiary for RRBs and co-operative banks.

Questions38: What is banking ombudsman scheme?

Answer: The banking ombudsman scheme is a scheme to listen to customer’s grievances and complaints regarding certain services provided by the bank. It was introduced under the Section 35 A of banking regulation act, 1949 by RBI with effect from 1995 which was later amended and became the banking ombudsman scheme, 2006.

Customer can appeal against the decision of ombudsman to deputy governor of RBI. He is the highest authority of appeal. All banks in India are covered under the scheme.

Question39: What is the difference between FII and FDI?

Answer: FDI or foreign direct investment is an investment that a parent company makes in a foreign country. FII or Foreign Institutional Investor is an investment made by an investor in the markets of a foreign nation. FII can enter the stock market easily and also withdraw from it easily. But FDI cannot enter and exit that easily as FDI only targets a specific sector.

Question 40: What is the CAD? What is Fiscal deficit?

Answer: CAD or current account deficit is the difference between the imports and exports of a nation in one financial year whereas fiscal deficit is the difference between total revenue and expenditure of a nation.

Question 41: What is inflation and deflation?

Answer: Inflation is the increase in the price of goods and services due to more demand and less supply. In inflation, there is more liquidity in market which has to be controlled to reduce the purchasing power of customers.

Deflation is the decrease in prices of goods and services due to more supply and very less demand. In deflation, there is lack of liquidity in market which results in very weak purchasing power of people.

Question 42: What is Capital Adequacy Ratio? What is DEMAT account?

Answer: CAR is the proportion of capital to the banks’ risk. DEMAT accounts are those in which shares, securities and insurance policies are kept in electronic form.

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Question 43: Name a few poverty eradication schemes of govt. of India.

Answer: Food Security bill, MNREGA, Sarva Shiksha Abhiyaan, Antoday Yojana, JNURRM, Swalamban Yojana, Nirmal Gram Yojana, Rajiv Awas Yojana, Indira Gandhi Pension plan etc.

Question44: Define CAPM

Answer: CAPM is the capital asset pricing model, and it is a model designed to find the expected return on an investment and therefore the appropriate discount rate for a company’s cash flows. It provides the required rate of return given the riskiness of the asset.

Question 45: What is accretion and dilution?

Answer: Accretion is asset growth through addition or expansion. Accretion can occur through a company’s internal development or by way of mergers and acquisitions. Dilution is a reduction in earnings per share of stock that occurs when additional shares are issued or the stock changes into convertible securities.

Question 46: Why should a company prefer equity finance to debt finance?

Answer: Equity financing is less risky (you won’t have to pay it back). You’ll have more cash on hand. You won’t have to channel profits into loan repayment. Your equity investors will have a longer term view. Your company will have more credibility. And you might get to tap your investors’ network to help you develop the business.

Question 47: How do you boost returns in an LBO?

Answer: The key levers are: a lower purchase price, a higher exit price (when the company is sold on), increased leverage. improving the way the company operations, or getting cheap financing.

Question 48: What’s the Treasury Stock Method?

Answer: The treasury stock method is used to calculate the net increase in shares outstanding if in-the-money options and warrants were to be exercised.

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Question 49: What is ‘prime rate’?

Answer: Basically, ‘prime rate’ is the rate of interest that is decided by nations (U.S.A) largest banks for their preferred customers, having a good credit score. Much ‘variable’ interest depends on the ‘prime rates’. For example, the ‘APR’ (Annual Percentage Rate) on a credit card is 10% plus prime rate, and if the prime rate is 3%, the current ‘APR’ on that credit card would be 13%.

Question 50: What is the ‘cost of debt’?

Answer: When any company borrows funds, from a financial institution (bank) or other resources the interest paid on that amount is known as ‘cost of debt’.

Top 50 Banking Interview Questions

Every Bank conducts written Exam to recruit the eligible applicants. A large number of aspirants can take part in this exam. After the exam, Bank organizes an Interview for the selection of talented applicants.

In an interview, the interviewer is trying to check your skills which are related to your Communication Skills, personality skills, and knowledge skills. So you need to show that you are skilled for the job. For this, practice is very necessary for pass candidates in the written exam of the Bank.

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