“The banking interview is one of the most important stages during recruitment in the banking sector. Let us aim at some of the most frequently asked banking interview questions in this article.”
Banking interview questions: The banking interview questions are a set of questions prepared to assess the candidates skills required for a particular job role. Given below are some of the latest banking interview questions asked during the interview rounds of various banking exams.
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Top 10 Banking Interview Questions And Answers For 2024
Some of the most frequently asked banking interview questions are listed below, along with their answers.
Q1. What is the role of the banking sector in the economy of a country?
Ans: The banking sector plays a major role in shaping a country’s economy. The banking sector is the main source of credit, loans, investment options, risk management options, etc. A bank acts as a bridge between depositors and borrowers. They maintain the smooth flow of capital with proper analysis.
Q2. What is the importance of the banking sector in a country?
Ans: The banking sector is one of the most important sectors of a county as it provides credit, loans, investment, and infrastructure to its customers. It acts as a bridge between a borrower and depositor. It plays a significant and important role in the economic growth of a country. This sector provides huge employment opportunities, especially for the freshers.
Q3. What are some of the most important banking services?
Ans: Some of the most important banking services are given here.
- Account options (Savings, Current, CD, and money market account)
- Loan options
- Credit and debit cards
- Wealth management
- Mortgage services
- Overdraft services
Q4. Tell me something about yourself.
Ans: During any interview, the first question that the interviewer asks most likely is your introduction. Be very positive and confident while answering this question. Introduce yourself by adding your name, qualifications, skills, and goals. Do not stretch your introduction too long. Keep it within the 2 minutes range and cover all the important relevant facts related to the job role.
Q5. Why are you interested in joining the banking sector?
Ans: Candidates must mention some of the important advantages of working in the banking sector. Check out some major ways of covering this answer below.
- The banking sector plays a major part in influencing a country’s economy. It is one of the most important sectors in the job market.
- It provides many new opportunities and flexible qualification criteria.
- It is one of the most rapid growing sectors, with more than a 10 fold increase.
- Working here will teach me to learn and adapt to many new challenges and deadlines.
- It provides growth opportunities and promotions based on performance based exams held at regular intervals.
- It ensures good work life balance and a stable career.
- It provides many entry level jobs, especially for recent graduates
Apart from these options, candidates can also give their personal reasons for choosing this banking sector.
Q4. What are the different types of commercial banks in India?
Ans: There are four major types of commercial banks.
- Retail Bank: It is also known as consumer or personal bank because it directly deals with consumer transaction related work and other banking services. It offers banking and financial services to individuals or small businesses rather than large corporations and financial institutions.
- Corporate or Business Banking: Corporate banks generally deal with corporates and large businesses, and government departments with high trade and turnover in the market.
- Investment Banking: Investment banks provide a range of financial services to government, individuals, and businesses. Investment banking is also known as Securities banking. It includes major services such as underwriting, mergers and acquisitions, asset management, risk management, sales and trading, etc.
- Non traditional banks: Many non banking services also provide financial services similar to the banks. They provide important services such as credit and debit cards, account options, loan, investment options, net banking, and many other options.
Q5. What is loan grading?
Ans: Loan grading is a system used to assess the credit risk associated with approving a particular bank loan. It is a classification criteria based on the major risks and parameters related to a loan, such as repayment time, the borrower’s credit history, identity validations, etc. The loan is then classified into a particular category based on the amount and risk associated.
Q6. What do you mean by Line of Credit?
Ans: The line of Credit (LOC) is defined as an arrangement between a banking service and a borrower where they agree on a certain amount of credit based on the borrower’s demand. Unlike traditional banking services, where the total sum required is given at once, this service allows the borrower to withdraw money as required up to a certain limit. The borrowers can withdraw the amount at any rate and pay the interest only for the amount they withdraw in total.
Q7. What is Charge off?
Ans: Charge off is a condition where the banking services that provided the loan to the browser decide to close the unpaid debts as they are no longer expecting that they can be collected. It is noted under the loss criteria or bad debt. However, it does not mean that the borrower is free to pay the loan amount.
Q8. What are some major types of loans provided by the banking institutions?
Ans: Some of the major types of loan options provided by the banking services are given below for candidates reference.
- Personal loans
- Car loans
- Home loans
- Two wheeler loans
- Credit card Loans
- Small business loan
- Home renovation plan loans
- Agricultural loans
- Cash advances
- Payday loans
- Gold loan
- Educational loan
- Consumer durable loan
Q9. What is known as an Interbank deposit?
Ans: An interbank deposit is the process of making a deposit by one bank into an account at another bank. For this bank, keep the account of the organization under due. This practice is generally followed by financial institutions. It is generally a short term lending and borrowing with other banks.
Q10. What are some important things to keep in mind while opening an account at a bank?
Ans: Some of the major things that must be kept while creating an account number in a bank are
- Identity proof
- Address proof
- Tax identification number (if applicable)
- Employment informations
- Initial deposit
- Visa or Residency Permits (for non-residents)
- Additional documentation based on the type of account.
Top 10 Frequent Banking Interview Questions 2024
Q1. What is a financial management system?
Ans: Financial management system is a software used by the banking organizations to keep a record of the income, assets, loan, and expenses incurred by the bank.
Q2. What is the need for a credit management system?
Ans: Credit management system helps to ensure smooth cash flow, track customer credit, analyze new customers, approve customer credit applications, etc.
Q3. How will you handle a situation of conflict where a customer is not happy with the banking services?
Ans: Here, the most important point to include while answering is the importance of assuring the customers have patience. First listening to the problem faced by the customers. Now, come up with some frequent first stage answers to cross check whether the issue is on the customer side or the bank side. Also, assure the customers that their issues will be resolved on a priority basis.
Q4. Why do you consider yourself fit for this job role?
Ans: The interviewer here is assessing your confidence and vision. Candidates must answer this question very carefully. Mention the relevant skills along with the reason why you will be fit for this role. Also, mention the certifications and real time projects you worked on to acquire the exposure and relevant skills for the particular job role.
Q5. What is the major difference between Demand Draft and Cheque?
Ans: Some major differences between a demand draft and cheque are given in the table below.
| Banking Interview Questions | |
| Demand Draft | Cheque |
| It is issued by banks. | It is issued by the customer or account holders. |
| The funds asked for in the demand draft are paid in advance by the person who purchases from the issuing bank. | The fund is collected from the drawer bank account in the bank mentioned on the cheque. |
| It is often used for large transactions. | Acceptance of cheques depends on the sufficient funds in the drawers account. |
| It is more secure than a demand draft. | It is less secure compared to a demand draft. |
Q6: Could you list some of your credentials or abilities?
Ans: Candidates need to highlight their relevant banking industry experiences and skills. Also, mention the qualifications acquired till the present. Candidates must discuss their qualifications and provide specific examples of how they will help the company.
Q7. Do you have any experience working in the banking field?
Ans: Candidates are required to present any prior work experience if they have any. Freshers must provide evidence of their qualifications, certificates, and projects related to the industry in order to be considered for a position at HDFC Bank.
Q8. What are your objectives for the banking industry in the future?
Ans: Candidates have to include their goals and the career plan they created. Additionally, candidates must emphasize how their plan helps them manage the requirements for this position.
Q9. What is Credit Score in Banking?
Ans: A credit score is based on the repayment history of a customer for a banking loan or service. It contains crucial details like account count, payment history, debt history, and other details. In order to apply for loans and other major banking services, candidates need to have a high credit score. A good credit score is defined as having a credit score of at least 700 or more.
Q10. What is a fixed deposit?
Ans: A fixed deposit means depositing a particular amount for a certain amount of time where the bank will provide customers with a monthly interest at the time of maturity.
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