1. What is bank and its features and types? A bank is a financial organization where people deposit their money to keep it safe. Banks play an important role in the financial system and the economy. As a key component of the financial system, banks allocate funds from savers to borrowers in an efficient manner.
2. Name the different types of accounts? Normally there are 4 types of deposits account in Bank which are

• Saving Account


• Current Account


• Recurring Account


• Fixed Deposit Account

3. What is demand Draft? A demand draft is an instrument used for effecting transfer of money. It is a Negotiable Instrument. Cheque and Demand-Draft both are used for Transfer of money. You can 100% trust a DD. It is a banker's Cheque. A Cheque may be dishonored for lack of funds a DD cannot. Cheque is written by an individual and Demand draft is issued by a bank. People believe banks more than individuals.
4. What is Cheque? Cheque is a negotiable instrument instructing a Bank to pay a specific amount from a specified account held in the maker/depositor's name with that Bank. A bill of exchange drawn on a specified banker and payable on demand. “Written order directing a bank to pay money”.
5. Why do you want to enter banking? Banking is one of the fastest growing sectors in India with more stable and high growth and more over providing wide range of career opportunities for graduates. So I want to take an opportunity to join in a bank.
6.What is the difference between Cheque and Demand Draft? Both are used for transfer the amount b/w two accounts of same or different Bank. Cheque is written by an individual and withdrawn from the account whereas Demand draft is issued by a bank where you have to pay before issuing.
7. What are NBFCs and difference between NBFCs and Bank? Non-bank financial companies (NBFCs) are financial institutions that provide banking services, but do not hold a banking license. NBFCs do offer all sorts of banking services, such as loans and credit facilities, retirement planning, money markets, underwriting, and merger activities. These institutions are not allowed to take deposits from the public.
8. What is Private Banking? Banking services offered to high net-worth individuals. Private banking institution assists the high net-worth individual in investing his/her money in exchange for commissions and fees. The term "private" refers to the customer service being rendered on a more personal basis.
9. What is the Use of Computers in a Bank? Computers are used for many purposes in banks like: Computer store details of customers account information. Computers can solve billions of complex mathematical operations in fractions of a second. Computers can be used for user authentication. Computers can be used on a network to instantly contact other branches. When you use an ATM, you are using a networked computer terminal. It's easier to access/update the information. An employee can also check a Customer's account balance instantly. Computers help a bank save time and money, and can be used as an aid to generate profits.
10. What do you mean by Central Bank of India? The central bank of the country is the Reserve Bank of India (RBI). It was established in April 1935 with a share capital of Rs. 5 crores based on the recommendations of the Hilton Young Commission. RBI was nationalized on 1 January 1949.
11. What are NBFCs and difference between NBFCs and Bank? Non-bank financial companies (NBFCs) are financial institutions that provide banking services, but do not hold a banking license. NBFCs do offer all sorts of banking services, such as loans and credit facilities, retirement planning, money markets, underwriting, and merger activities. These institutions are not allowed to take deposits from the public.
12. What are the functions of RBI?

• The Reserve Bank of India is the central bank of India, was established on April 1,1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.


• The Reserve Bank of India was set up on the recommendations of the Hilton Young Commission.


• The commission submitted its report in the year 1926, though the bank was not set up for nine years.


• To regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage."


• Banker to the Government: Performs merchant banking function for the central and the state governments; also acts as their banker.


• Banker to banks: Maintains banking accounts of all scheduled banks.

Monetary policy A Monetary policy is the process by which the government, central bank, of a country controls (i) The supply of money,
(ii) Availability of money, and
(iii) Cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy.
Fiscal Policy Fiscal policy is the use of government spending and revenue collection to influence the economy. These policies affect tax rates, interest rates and government spending, in an effort to control the economy. Fiscal policy is an additional method to determine public revenue and public expenditure.
Mutual funds

• Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies.


• The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually.


• A company that invests its clients' pooled fund into securities that match its declared financial objectives.


• Asset management companies provide investors with more Diversification and investing options than they would have by themselves.


• Mutual funds, hedge funds and pension plans are all run by asset management companies. These companies earn income by charging service fees to their clients.

Non-Performing Assets Non-Performing Assets, also called non-performing loans, are loans, made by a bank or finance company, on which repayments or interest payments are not being made on time. A debt obligation where the borrower has not paid any previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The nonperforming asset is therefore not yielding any income to the lender in the form of principal and interest payments.
Recession A true economic recession can only be confirmed if GDP (Gross Domestic Product) growth is negative for a period of two or more consecutive quarters.
Foreign Exchange Reserves Foreign exchange reserves (also called Forex reserves) in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, SDRs and IMF reserve positions.
Dematerialization Dematerialization is a process by which the paper certificates of an investor are taken back by the company/registrar and actually destroyed and an equivalent number of securities are credited in electronic holdings of that investor.
Derivative A derivative is a financial contract that derives its value from another financial product/commodity (say spot rate) called underlying (that may be a stock, stock index, a foreign currency, a commodity). Forward contract in foreign exchange transaction, is a simple form of a derivative.
Banc assurance Banc assurance stands for distribution of financial products particularly the insurance policies (both the life and non-life), also called referral business, by banks as corporate agents, through their branches located in different parts of the country.
Money Laundering Money laundering means acquiring, owning, possessing or transferring any proceeds (of money) of crime or knowingly entering into any transaction related to proceeds of the crime either directly or indirectly or concealing or aiding in the concealment of the proceeds or gains of crime, within or outside India. It is a process for conversion of money obtained illegally to appear to have originated from legitimate sources.
Anti Money Laundering Money laundering is the process by which the origin of funds gained by illegal means is concealed and made to appear such that they have been derived from legitimate sources and inserting them back into economic circulation. Money laundering also covers financial transactions where the end use of funds goes for financing terrorism irrespective of the source of the funds. The prevention of money laundering act, 2002 was enacted to prevent money laundering and deal with those who are guilty of money laundering. The PMLA seeks to combat money laundering in India and has three main objectives: (i) To prevent and control money laundering
(ii) To confiscate and seize the property obtained from the laundered money; and
(iii) To deal with any other issue connected with money laundering in India. Case of AML – DMK’s Kanimozhi, A Raja and Dayalu Ammal were charged under anti-money-laundering act for their involvement in 2G scam.
Financial Inclusion Financial inclusion is a concept of making available banking/financial services to a vast section of low income groups and weaker sections at an affordable price. The objective of financial inclusion is to provide the service of basic banking products to the unserved masses of the country, aiming towards inclusive economic growth.
Foreign exchange reserves Foreign exchange reserves (also called Forex reserves) in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, SDRs and IMF reserve positions.
Credit risk It is basically the risk of loss, arising when a borrower is not capable of paying back the loan as promised. Such borrowers are also known as Sub-prime borrowers.
Cheque Truncation System Cheque Truncation System (CTS) or Image-based Clearing System (ICS), in India, is a project undertaken by the Reserve Bank of India (RBI) in 2008, for faster clearing of cheques. Cheque Truncation System (CTS) is a Cheque clearing system undertaken by the Reserve Bank of India (RBI) for faster clearing of cheques. Truncation is the process of stopping the physical movement of cheques which is replaced by electronic images and associated MICR line of the Cheque.
Certificate of Deposits Certificate of Deposit (CD) is a negotiable money market instrument and issued in dematerialized form or as a Usance Promissory Note against funds deposited at a bank or other eligible financial institution for a specified time period.
Sub-prime crisis The current Subprime crisis is due to sub-prime lending. These are the loans given to the people having low credit rating.
National Income National Income is the money value of all goods and services produced in a country during the year.
Per Capita Income The national income of a country, or region, divided by its population. Per capita income is often used to measure a country's standard of living.
Working capital Working capital is the amount of liquid assets a company has on hand. It amounts to current assets and cash minus current liabilities.
Repo Rate

• Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the banks have any shortage of funds they can borrow it from RBI.


• A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases, borrowing from RBI becomes more expensive.

Reverse Repo Rate This is exact opposite of Repo rate. Reverse Repo rate is the rate at which Reserve Bank of India (RBI) borrows money from banks. RBI uses this tool when it feels there is too much money floating in the banking system. Banks are always happy to lend money to RBI since their money is in safe hands with a good interest. An increase in Reverse repo rate can cause the banks to transfer more funds to RBI due to this attractive interest rates.
Bank Rate Bank rate, also referred to as the discount rate, is the rate of interest which a Central Bank(Reserve Bank of India) charges on the loans and advances that it extends to commercial banks and other financial intermediaries. Changes in the bank rate are often used by central banks to control the money supply.
Inflation Inflation is as an increase in the price of bunch of Goods and services that projects the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of prices in Goods and services. Inflation happens when there are fewer Goods and more buyers; this will result in increase in the price of Goods, since there is more demand and less supply of the goods.
Deflation Deflation is the continuous decrease in prices of goods and services. Deflation occurs when the inflation rate becomes negative (below zero) and stays there for a longer period.
Deposit Rate Interest Rates paid by a depository institution on the cash on deposit.
Disinvestment The Selling of the government stake in public sector undertakings.
Fiscal Deficit It is the difference between the government’s total receipts (excluding borrowings) and total expenditure.
Revenue deficit It defines that, where the net amount received (by taxes & other forms) fails to meet the predicted net amount to be received by the government.

SLR Rate

• SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to maintain in the form of cash, or gold or govt. approved securities (Bonds) before providing credit to its customers.
  


• SLR rate is determined and maintained by the RBI (Reserve Bank of India) in order to control the expansion of bank credit.


• SLR is determined as the percentage of total demand and percentage of time liabilities.


• Time Liabilities are the liabilities a commercial bank liable to pay to the customers on their anytime demand.


• SLR is used to control inflation and propel growth. Through SLR rate tuning the money supply in the system can be controlled efficiently.

PLR

• The Prime Interest Rate is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers).


• The rate is almost always the same among st major banks.


• Adjustments to the prime rate are made by banks at the same time; although, the prime rate does not adjust on any regular basis.


• The Prime Rate is usually adjusted at the same time and in correlation to the adjustments of the Fed Funds Rate.


• The rates reported below are based upon the prime rates on the first day of each respective month. Some banks use the name "Reference Rate" or "Base Lending Rate" to refer to their Prime Lending Rate.

FII FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of an institution. An institution established outside India, which proposes to invest in Indian market, in other words buying Indian stocks. FII's generally buy in large volumes which has an impact on the stock markets. Institutional Investors includes pension funds, mutual funds, Insurance Companies, Banks, etc.
FDI FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control” (Or) A foreign company having a stake in a Indian Company.
IPO IPO is Initial Public Offering. This is the first offering of shares to the general public from a company wishes to list on the stock exchanges.
GDP The Gross Domestic Product or GDP is a measure of all of the services and goods produced in a country over a specific period; classically a year.
GNP Gross National Product is measured as GDP plus income of residents from investments made abroad minus income earned by foreigners in domestic market.
SEZ SEZ means Special Economic Zone is the one of the part of government’s policies in India. A special Economic zone is a geographical region that economic laws which are more liberal than the usual economic laws in the country. The basic motto behind this is to increase foreign investment, development of infrastructure, job opportunities and increase the income level of the people.
NBFC A non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by government, but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property. NBFCs are doing functions akin to that of banks; however there are a few differences: (i) A NBFC cannot accept demand deposits (demand deposits are funds deposited at a depository institution that are payable on demand -- immediately or within a very short period -- like your Current or Savings Accounts.)
(ii) It is not a part of the payment and settlement system and as such cannot issue cheques to its customers; and
(iii) Deposit insurance facility of DICGC is not available for NBFC depositors unlike in case of banks.
NABARD

• NABARD was established by an act of Parliament on 12 July 1982 to implement the National Bank for Agriculture and Rural Development Act 1981.


• It replaced the Agricultural Credit Department (ACD) and Rural Planning and Credit Cell(RPCC) of Reserve Bank of India, and Agricultural Refinance and Development Corporation (ARDC).


• It is one of the premiere agency to provide credit in rural areas.
NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.

SIDBI The Small Industries Development Bank of India is a state-run bank aimed to aid the growth and development of micro, small and medium scale industries in India. Set up in 1990 through an act of parliament, it was incorporated initially as a wholly owned subsidiary of Industrial Development Bank of India.
SENSEX and NIFTY

• SENSEX is the short term for the words "Sensitive Index" and is associated with the Bombay (Mumbai) Stock Exchange (BSE).


• The SENSEX was first formed on 1-1-1986 and used the market capitalization of the 30 most traded stocks of BSE, where as NSE has 50 most traded stocks of NSE. SENSEX IS THE INDEX OF BSE. AND NIFTY IS THE INDEX OF NSE. BOTH WILL SHOW DAILY TRADING MARKS.


• Sensex and Nifty both are an "index”. An index is basically an indicator it indicates whether most of the stocks have gone up or most of the stocks have gone down.

SEBI SEBI is the regulator for the Securities Market in India. Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave.
CRM SEBI is the regulator for the Securities Market in India. Originally set up by the Government of India in 1988, it acquired statutory form in 1992 with SEBI Act 1992 being passed by the Indian Parliament. Chaired by C B Bhave.
LAF Liquidity Adjustment Facility (LAF) was introduced by RBI during June, 2000 in phases, to ensure smooth transition and keeping pace with technological up-gradation.
NPA An asset (loan), including a leased asset, becomes non-performing when it stops generating income for the bank.
RTGS System

• RTGS' stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting).


• 'Real Time' means the processing of instructions at the time they are received rather than at some later time; 'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis).


• Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable.

NEFT National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country participating in the Scheme.
DDM DDM is the dividend discount model of valuing a company.

1. What are the various risks that banks face? 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.

2. What are the Important Facts to Know About GST?

• The Goods and Services Tax (GST) is a value added tax that has replaced all indirect taxes levied on goods and services by the Government, both Central and States.


• The GST Bill, officially known as The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014, proposes a national Value added Tax to be implemented in India from April 2016.


• The GST is a consolidated tax based on a uniform rate of tax fixed for both goods and services. All goods and services, leaving aside a few (alcohol, tobacco, petroleum products), will be brought into the GST and there will be no difference between goods and services.


• A key panel on GST (Goods and Services Tax) headed by the chief economic advisor Arvind Subramanian submitted its recommendations to the government.

3. What are the minimum and maximum amount of remittance under RTGS and NEFT? RTGS

• Minimum Amount: RS 2 lakhs


• Maximum Amount: No Upper Ceiling

NEFT

• Minimum Amount: No minimum amount


• Maximum Amount: No Upper Ceiling

What is the difference between RTGS and NEFT? Thus, we can say that both RTGS and NEFT are schemes started by RBI for the benefit of the customers which allow accounts holders in the banks to electronically transfer the funds intra-bank. In the case of RTGS, settlement in on 'Real Time' basis whereas in case of NEFT the settlement in on batch basis and net basis. There are some other rules, regulations and differences, which we will be discussing below: RTGS:

• This type of transfer methods is applicable and available for fund transfers between Rs.2 lakh to Rs.10 lakh, however, the biggest advantage for RTGS is the fastest/real-time settlement factor.


• As soon as the transfer instructions are sent, the fund gets settled almost immediately. However, in order to take advantage of the RTGS facility, both the originator's and the beneficiary’s account has to be RTGS-enabled.


• Even though most banks are a part of the vast and popular RTGS transfer network facilitated by RBI, individuals are recommended to either get in touch with their bank directly or refer to their online banking section to discover their eligibility concerning access to RTGS payment system.


• The transaction fee under RTGS is higher than the other methods due to the faster settlement speed performed on an instruction by instruction basis.

NEFT:

• The funds transferred under this method are settled in batches (based on Deferred Net Settlement (DNS) and at a specific time of the day.


• If the transfer is initiative beyond the cut-off time specified by RBI, the funds are typically settled on the next working day.


• At present, the fund transfer requests under NEFT are processed in twelve batches between 8 a.m. to 7 p.m. on weekdays and six batches between 8 a.m. to 1 p.m. on Saturdays.
Unfortunately, NEFT is not available on Sundays and bank holidays.

• One of the biggest advantages of NEFT is the cost-effectiveness, an individual can carry out smaller value transfers without worrying about the transaction fee and service charges.


• A smaller fee on the transfer enables the individual to carry out more payments which make NEFT the most popular and extensively used method for online fund transfers.

4. What is Negotiable Instrument Act, 1881?

• Negotiable instruments are written orders or unconditional promises to pay a fixed sum of money on demand or at a certain time.


• Negotiable instruments may be transferred from one person to another, who is known as a holder in due course. Upon transfer, also called negotiation of the instrument, the holder obtains full legal title to the instrument.


• Negotiable instruments may be transferred by delivery or by endorsement and delivery. For e.g. promissory notes, bills of exchange, cheques, drafts, certificates of deposit are all examples of negotiable instruments

5. What is Right to information Act? The Right to Information act is a law enacted by the Parliament of India giving citizens of India access to records of the Central Government and State governments. The Act applies to all States and Union Territories of India, except the State of Jammu and Kashmir - which is covered under a State-level law. This law was passed by Parliament on 15 June 2005 and came fully into force on 13 October 2005.
6. What is the difference between Nationalized bank and Private Bank ?

• A Nationalized bank is one that is owned by the government of the country. Since the people decide who the government is, they are also referred to as public sector banks.


• The government is responsible for the money deposited into the accounts of these banks. Whereas a private sector bank is one that is owned by an independent individual or a company that is controlled by a few individuals.


• In short, the bank is owned by someone else and they run the bank. The person owning/running the bank is responsible for the money deposited into the accounts of these banks.

7. What is Right to information Act?

• The Right to Information act is a law enacted by the Parliament of India giving citizens of India access to records of the Central Government and State Governments.


• The Act applies to all States and Union Territories of India, except the State of Jammu and Kashmir - which is covered under a State-level law. This law was passed by Parliament on 15 June 2005 and came fully into force on 13th October 2005.