3. Banking Interview Questions & Answers

Q 46.   What is BSBDA?

Ans.   Under the guidelines of RBI issued on 10, August 2012, it is mandated that any individual including poor or those from weaken section of the society, can open zero balance account in any scheduled commercial bank including foreign banks. These accounts are called Basic Savings Bank Deposit Accounts (BSBDA).


Q 47.   What is NABARD?

Ans.   NABARD was established on 12 July 1982 as per National Bank for Agriculture and Rural Development Act 1981 by Indian Parliament. It is an apex development bank in India having headquarters in Mumbai. It replaced the Agricultural Credit Department (ACD), Rural Planning and Credit Cell (RPCC) of RBI and Agricultural Refinance and Development Corporation (ARDC). NABARD’s primary objective is to provide credit to agriculture, small industries etc. NABARD was established on the recommendations of Shivaraman Committee.


Q 48.   What is SEBI?

Ans.   SEBI (Securities and Exchange Board of India) is the regulator for the Securities Market in India. It was 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. Its Headquarters in Mumbai.


Q 49. What is SIDBI?

Ans.   SIDBI (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


Q 50.   What is SWIFT Code?

Ans.   SWIFT: – Society Worldwide Interbank Financial Telecommunication. Almost all FOREX related messages arc sent through SWIFT. SWIFT Code is a standard format of bank Identified code. This code is used particularly in International transfer of money between banks. SWIFT Code consists of 8 or 11 character. In SWIFT code, first 4 characters are bank code, next 2 characters arc country code, and next two characters are location code. The next 3 digits are optional and indicate the branch code.


Q 51.   What are Non-Performing assets?

Ans.   Non-Performing Assets (NPA) refers to bad loans. If the borrower defaults on a payment (whether principal or interest) for 90 days, the loan is classified as NPA.


Q 52.   What are Mutual funds?

Ans.   Mutual funds are investment companies that pool money from investors and use this capital to invest in securities of different companies. For this, they charge some commission or fees from their clients. Mutual funds have a fund manager that trades the pooled money on a regular basis. Mutual funds, hedge funds and pension plans are all run by asset management companies.


Q 53.   What is SENSEX and NIFTY?

Ans.   SENSEX and NIFTY both are indexes. SENSEX stands for Sensitive Index and is associated with the Bombay Stock Exchange (BSE), established on 1-1-1986. This index shows the 30 most traded stocks of BSE. NIFTY, on the other hand, is the index of National Stock Exchange. NIFTY shows the 50 most traded stocks of NSE.


Q 54. What is Bancassurance?

Ans.   Bancassurance is selling of financial products especially the insurance policies (both life and non-life) by banks as corporate agents.


Q 55.   What is NOSTRO and VOSTRO account?

Ans.   A NOSTRO maintained by an Indian bank in foreign countries. A VOSTRO account is maintained by a foreign bank in India account with the corresponding bank in India.


Q 56.   What is foreign exchange reserve?

Ans.   Foreign exchange reserve (also called Forex reserves) is the foreign currency deposits and bonds (only), hold by central bank or monetary authorities of a country. Sometimes in broader aspect, Forex reserve is also used to indicate foreign exchange, gold, SDRs and IMF reserve positions


Q 57.   What is Cryptocurrency?

Ans.   Cryptocurrency is a digitally created currency which is dtores electronically ib blockchains. It uses encryption techniques to control the creation of currency units and verify the transfer of funds.

It has no physical form and not control by any central authority, it’s powered by its users i.e. it’s decentralized peer-to-peer payment network. Bitcoin, Litecoin, Namecoinand PPcoin are the some examples of cryptocurrencies.


Q 58.   What is a Non-Banking Financial Company (NBFC)?

Ans.   Non-banking financial companies (NBFCs) are financial institutions which are registered under Company Act 1956, provide financial services, but do not hold a banking license. These institutions can’t take deposits from the public, can’t issue cheques; as they do not come under Payment as they do not come under Payment and Settlement System. However, these institutions perform all operations under the ambit of banking regulations. A non-banking institution which is a company and has the principal business of receiving deposits under any scheme or arrangements in one lump sum or in other manner is also a non-financial company (residuary non-banking company). NBFCs are not insured by DICGC (Deposit Insurance and Credit Guarantee Corporation).


Q 59.   What is demonetization and what were the reasons for doing it in 2016?

Ans.   Demonetization is the act of removing the status of a currency unit as legal tender. The opposite or demonetization is remonetization where a currency unit is restored as legal tender Described as India’s Surgical Strike on Black Money; demonetization was one to counter parallel economy counterfeit notes in circulation, and terror financing are some important facts regarding this demonetization.

Old 500 and 1000 notes were banned on the midnight of 8th November, 2016 Rs 100, 50, 10 and coins of all denominations remained a legal tender.

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