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of bank before nationalization (if any), Paid-up Capital and worth of the bank, Number of
branches in India and abroad etc. Basically you have to know history, services, products,
achievement, management (name of CMD) etc of banks
2. International and national information on banking industry.
3. Brief information of Banking Regulation Act, RBI Act , Negotiable Instrument Act, Basic
Banking Knowledge: Banking, Banking Business, Debit and Credit, Types of Banks, Banking
Terms, Banking Reforms in India, Computerisation in India, Types of Accounts, Customer,
Currencies, Foreign Exchange, Types of loan accounts, Banking Technology and its
implementation, Banking Innovative Products, Third Party Products etc.
4. Keep updated. Most of the questions that the panel members ask are from the current affairs
something inappropriate which you may regret later. Also remember to speak in a polite and
respectful manner.
6. Do not rush while speaking. Speak in calm and composed manner so that you may not utter
something inappropriate which you may regret later. Also remember to speak in a polite and
respectful manner.
7. Be prepared for situation based questions related to personal life and resolving critical issues.
wear clean and wrinkle free sober suits. Women should not wear any floral dresses. It should
be simple and sober.
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Personal Questions:
Tell us something about yourself
Good morning to sir/mam and all the panel members.
My name is XYZ. I was born and brought up in ABC. I did my schooling from ___. I have completed my
graduation in ____from ____. I like to be disciplined in all walks of life. I like speaking in a polite manner
which at times makes a good impression on others. I am always ready to listen to others and easy to get
along with them. I coordinated the events in my college fest so you can also think me of as a good leader.
My role model is _________ who is ______ (you can also add achievements here). My strength is I can
easily adopt things in life and my weakness is sometimes I end up a little bit of overdoing to complete my
work and i hate procrastination.
Why do you want to join Banking Sector?
Answer: I am always fascinated towards the banking industry specially the role a banker plays as they reach
to the public directly. Moreover banking is one of the most reputed and fastest growing sector in India which
gives immense career growth opportunity to an individual, respect in society and job security. Being a
banker I can fulfil my own dreams as well as I can give the best in me to the bank by providing appropriate
services to the customers.
What is a Bank?
Attention: Dont mug up from books or sites try to answer it in your style.
e.g. Banking is one of the most essential part in ones life as it deals with cash and cash transactions.
Financial needs are equally important in life for enjoying a comfortable economic status. So it plays a vital
role for all of us.
How do you see yourself flourish in Banking Sector after 5 Years?
They are not looking to hear about your personal aspirations e.g. what you want to be and what you will do
in upcoming 5 years. They want to know if you are willing to stick around the company and grow
professionally and solve their problems or not. Tell them you see yourself in the role of Manager in MMG
Scale-II. Be sure about the responsibilities of Manager MMG Scale-II. While answering you should express
that you plan on staying at the Bank for a long time. Demonstrate some of you key strengths and how you
plan on enhancing those strengths through employment with that particular bank.
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United Bank of India is one of the 14 banks which were nationalised on July 19, 1969. On October 12,
1950, the name of Bengal Central Bank Limited (established in 1918 as Bengal Central Loan Company
Limited) was changed to United Bank of India Limited for the purpose of amalgamation and on December
18, 1950, Comilla Banking Corporation Limited (established in 1914), the Camilla Union Bank Limited
(established in 1922), the Hooghly Bank (established 1932) stood amalgamated with the Bank.
Subsequently, other banks namely, Cuttack Bank Limited, Tezpur Industrial Bank Limited, Hindusthan
Mercantile Limited and Narang Bank of India Limited were merged with the Bank.
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Bank is 100% CBS enabled with 1999 branches and offices and is having a Total business of more
than Rs 2 lac crore. Presently the Bank is having a Three-tier organisational set-up consisting of the
Head Office, 35 Regional Offices and the Branches.
At present it is the Lead Bank in 30 districts in the States of West Bengal, Assam, Manipur and
Tripura.
UBI has sponsored 4 Regional Rural Banks (RRB) one each in West Bengal, Assam, Manipur and
Tripura.
UBI is also known as the 'Tea Bank' because of its age-old association with the financing of tea
gardens. It has been the largest lender to the tea industry.
The Bank has three full fledged Overseas Branches one each at Kolkata, New Delhi and Mumbai
with fully equipped dealing room and SWIFT terminal .
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Accounts can be opened in two ways: Going to a bank branch or though Business Correspondents (BCs).
Business correspondents are the individuals or any other entities just like insurance agents and reach the
people in far flung or remote areas which are unbanked areas. They are called bank representatives. They
help the people in any banking activity like opening accounts, depositing money, withdrawing money, give
away loan, or any other transaction.
Sometimes opening a bank branch in village or remote areas is not feasible, so a BC model was initiated by
RBI.
Functions of Banks
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Types of Cheques:
Order Cheque: A cheque which is payable to a particular person on his order is called an order cheque.
This is a cheque whereby the printed word Bearer on the cheque is cancelled. The cancellation of the word
Bearer automatically makes the cheque an order cheque.
Bearer Cheque: A cheque which is payable to a person whosoever bears, is called bearer cheque. The
cheque sometimes can be made payable to Cash or bearer or made payable to a specific name.
Stale Cheque: Check presented at the paying bank after a certain period typically six months of its payment
date. A stale check is not an invalid check, but it may be deemed an irregular bill of exchange. A bank may
refuse to honor it unless its drawer reconfirms it payment either by inserting a new payment date or by
issuing a new check. Also called stale dated check.
Multilated Cheque: If a cheque is torn into two or more pieces such cheque is Mutilated Cheque. If it
presented for payment, such a cheque the bank will not make payment against such a cheque without getting
confirmation of the drawer. In case, if a cheque is torn at the corners and no material fact is erased or
cancelled, the bank may make payment against such a cheque.
Post Dated Cheque: If a cheque bears a date later than the date of issue, it is termed as post dated cheque.
Any check or draft that has a future date written upon it by the user. The amount of the check will not be
drawn from the account until the date written on the check. For example, a check written on the 14th of the
month but dated for the 28th will not be cashed for another two weeks.
Open Cheque: A cheque that is not a crossed cheque. The person whose name appears on the cheque can
write the name of another person on it, and the money will be paid to them. An open cheque is a cheque that
is not crossed on the left corner and payable at the drawee bank on presentation of the cheque.
Crossed Cheque: A crossed cheque is one which has two short parallel lines marked across its face. A
cheque which carries too parallel transverse lines across the face of the cheque with or without the words I
and co, is said to be crossed. Crossed cheques are of two types. By simply crossing a cheque or with the
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1. The RBI logo was inspired from the East India Company Double Mohur.
2. Formed on April 1, 1935 as a private entity, but is a government entity now. Nationalization of the central
bank did not happen till 1949.
3. The financial year of RBI is from 1 July to 30 June.
4. The first woman to become the deputy governor of RBI is K. J. Udeshi.
5. RBI demonetized notes in the denominations of Rs. 5,000 and Rs. 10,000 in 1938. They were
reintroduced in 1954 and again demonetized in 1978. RBI can print these notes according to the RBI act of
1934.
6. RBI was also the central bank for two other countries. It played the role of Central Bank of Pakistan till
June 1948 and the Central Bank of Burma ( Myanmar) till April 1947.
7. The bank was established on the recommendation of the Hilton Young Commission.
8. Manmohan Singh is the only Prime Minister to have also served as the Governor of RBI.
9. The first Indian to hold the position of the Governor of RBI was Mr. C.D. Deshmukh. He was the third
governor of RBI.
10. RBI runs a Monetary Museum in the premises of the Mumbai head office.
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By the 1960s, the Indian banking industry had become an important tool to facilitate the
development of the Indian economy. At the same time, it had emerged as a large employer and a
debate had followed the nationalization of the banking industry. Indira Gandhi, the then Prime
Minister of India expressed the intention of the Government of India in the annual conference
of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank
Nationalization."
Government of India issued an ordinance (Banking Companies Ordinance,1969) and nationalised the
14 largest commercial banks with effect from 19 July 1969.
Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9 August 1969.
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The Indian banking sector is classified into scheduled banks and non-scheduled banks.
All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are
Scheduled Banks. These banks comprise Scheduled Commercial Banks and Scheduled Co-operative
Banks. Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled Urban
Cooperative Banks.
Scheduled Commercial Banks in India are categorized into five different groups:
NABARD
NABARD is an apex development bank, established in 1982 by a Special Act of the Parliament, with a
mandate to uplift rural India by facilitating credit flow in agriculture, cottage and village industries,
handicrafts and small-scale industries. NABARD functions to promote sustainable rural development for
attaining prosperity of rural areas in India.
RBI has sold its own stake to the Government of India. Therefore, Government of India holds 99% stake in
NABARD.
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It has power to deal with all matters concerning policy, planning as well as operations in giving
credit for agriculture and other economic activities in the rural areas.
A refinancing agency for those institutions that provide investment and production credit for
promoting the several developmental programs for rural development.
Improving the absorptive capacity of the credit delivery system in India, including monitoring,
formulation of rehabilitation schemes, restructuring of credit institutions, and training of personnel.
Co-ordinates the rural credit financing activities of all sorts of institutions engaged in developmental
work at the field level.
Prepares rural credit plans, annually, for all districts in the country.
Promotes research in rural banking, and the field of agriculture and rural development.
IDBI
Industrial Development Bank of India (IDBI) came into being on 1st July, 1964 as a Development Financial
Institutions under IDBI Act 1964.
*Key points:
Regarded as a Public Financial Institution in terms of Companies Act. It continued as DFI till 2004
when it was transferred into a Bank. To transform this into Bank Industrial Development Bank
Act 2003 was passed.
A new company under the name of Industrial Development Bank of India Ltd. was incorporated as a
Govt company under the Companies Act on 27th September, 2004, and thus now it came to be
known as IDBI Ltd wef 1st October 2004 but it also worked as a Bank in terms of the Repeal Act.
W.e.f. 2nd April, 2005, IDBI Bank Ltd. was finally amalgamated with IDBI Ltd. and was known as
IDBI Ltd. It is a Public Sector Bank as GoI has above 70% shareholding in this Bank.
SIDBI
Small Industries Development Bank of India (SIDBI) was set up under an Act of Parliament in 1990.
Though it was a wholly owned subsidiary of Industrial Development Bank of India, presently the ownership
is held by 33 Government of India owned / controlled institutions.
Functions:
To initiate steps for technological upgradation and modernisation of existing units.
To expand the channels for marketing the products of SSI sector in domestic and international
markets.
To promote employment oriented industries especially in semi-urban areas to create more
employment opportunities and thereby checking migration of people to urban areas.
IFCI
Government of India set up the Industrial Finance Corporation of India (IFCI) in 1948 under a special
Act. This is the first financial institution set up in India with the main object of making medium and long
term credit to industrial needs. It issue bonds and debentures in the open market, to borrow foreign
currency from the World Bank and other organisations, accept deposits from the public and also borrow
from the Reserve Bank.
Functions
Grants loans and advances to industrial concerns.
Granting of loans both in rupees and foreign currencies.
Underwrites the issue of stocks, bonds, shares etc.
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World Bank
Stability
Growth
*Key point: There is no Ombudsman for hearing complaints against NBFCs. In respect of credit card
operations of an NBFC, which is a subsidiary of a bank if a complainant does not get satisfactory response
from the NBFC within a maximum period of thirty 30days from the date of lodging the complaint, the
customer will have the option to approach the Office of the concerned Banking Ombudsman for
redressal of his grievances.
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The structure of cooperative network in India can be divided into 2 broad segments
Urban Cooperative Banks
Rural Cooperatives
Urban Cooperatives are scheduled and non-scheduled.
Banking activities of Urban Cooperative Banks are monitored by RBI. Registration and Management
activities are managed by Registrar of Cooperative Societies (RCS). These RCS operate in single-state and
Central RCS (CRCS) operate in multiple state.
Rural Cooperatives are short-term and long-term structures.
Short-term cooperative banks are three tiered operating in different states.
State Cooperative Banks: Operate at the apex level in states
District Central Cooperative Banks: Operate at the district levels
Primary Agricultural Credit Societies: Operate at the village or grass-root level.
Long-term structures
State Cooperative Agriculture and Rural Development Banks (SCARDS): Operate at state-level.
Primary Cooperative Agriculture and Rural Development Banks (PCARDBS): Operate at district/block
level.
Core points related to Monetary & Fiscal Policy
Both are complimentary to each other in balancing growth, unemployment and inflation.
Fiscal policy is by the government relates to the revenue and expenditure policies of the government and
also it is the use of government funds to influence the economy, like the annual budget and taxation.
Monetary policy is administered by the central bank of the nation with regard to money supply, interest
rates etc.
Following are the instruments of Monetary Policy in India.
Cash Reserve Ratio (CRR) It is the share of net demand and time liabilities (deposits) that banks must
maintain as cash balance with the Reserve Bank.
Now what are Demand and Time Liabilities?
Demand Liabilities
Current Deposits, Savings bank deposits, Margins held against letters of credit/guarantees, Balances in
overdue fixed deposits, Outstanding DDs, Unclaimed deposits, Credit balances in the Cash Credit account
and deposits held as security for advances which are payable on demand & Money at Call and Short Notice
from outside the Banking System (Liability to others).
Time Liabilities
Fixed deposits, cash certificates, cumulative and recurring deposits, time liabilities portion of savings bank
deposits, staff security deposits, margin held against letters of credit, if not payable on demand, & deposits
held as securities for advances which are not payable on demand and Gold deposits.
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With every cut in 25 basis points in CRR it would infuse the liquidity of Rs.16000 crore.
Statutory Liquidity Ratio (SLR): The share of net demand and time liabilities that banks must maintain in
safe and liquid assets, such as, government securities, cash and gold. Changes in SLR often influence the
availability of resources in the banking system for lending to the private sector.
Refinance facilities: Sector-specific refinance facilities aim at achieving sector specific objectives through
provision of liquidity at a cost linked to the policy repo rate.
Liquidity Adjustment Facility (LAF): Consists of overnight and term repo/reverse repo auctions. Reserve
Bank has increased the proportion of liquidity injected in the LAF through term-repos.
Term Repos: Reserve Bank introduced term repos of different tenors, such as, 7/14/28 days to inject
liquidity over a period that is longer than overnight.
Aim: To help develop interbank money market which in turn can set market based benchmarks for pricing
of loans and deposits and through that improve transmission of monetary policy.
Marginal Standing Facility (MSF):
Scheduled commercial banks can borrow additional amount of overnight money from the Reserve Bank by
dipping into their SLR portfolio up to a limit (currently 2% of their NDTL) at a penal rate of interest
(currently 100 basis points above the repo rate).
This provides a safety valve against unanticipated liquidity shocks to the banking system. MSF rate and
reverse repo rate determine the corridor for the daily movement in short term money market interest rates.
Open Market Operations (OMOs): These include both, outright purchase/sale of government securities
for injection or absorption of liquidity
Bank Rate: Rate at which the Reserve Bank is ready to buy or rediscount bills of exchange or other
commercial papers. This rate has been aligned to the MSF rate and therefore changes automatically as and
when the MSF rate changes alongside policy repo rate changes.
Prime Lending Rate
The interest rate charged by banks to their largest, most secure, and most creditworthy customers on shortterm loans. This rate is used as a guide for computing interest rates for other borrowers. It is also called
prime rate.
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Security
Upto Rs.4,00,000: Parents need to be joint borrowers but security is not required.
Above Rs.4,00,000 and below Rs.7,50,000: Besides parents joint borrower condition, you need to bring
collateral security in the form of suitable third party guarantee will be taken. But if banks satisfied with
financial condition of the borrower then they may waive the condition of third party collateral.
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Once the borrower has failed to make interest or principle payments for 90 days the loan is
considered to be a non-performing asset.
If the status of NPAs in banks is not controlled, banks can become bankrupt.
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For detailed banking notes follow the link: Banking and Finance
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