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RSConcept of National Income :
GDP, NDP, GNP, NNP
🔸️1. GDP (Gross Domestic Product)
The value of final goods and services produced inside the boundary of nation during one year.
GDP= Value of gross domestic output- value of intermediate consumption
Different uses of GDP are :
Per annum percentage change in the growth rate of an economy.It is a quantitative aspect and its size gives the estimate about the internal strength of economy. But it DOES NOT say about the qualitativeaspect of the produced goods.GDP is used by the IMF or the WORLD BANK to do comparative analysis of its members.
🔸️2.NDP (Net Domestic Product)
It is the net form of GDP.
NDP= GDP – Depreciation
Depreciation is a decrease in an asset’s value caused by unfavourable market conditions.
Uses of NDP
Government announces the rate of depreciation in the economy. In domestic use, NDP is is used to understand the loss due to depreciation.NDP is not used for the comparative economies since the rate of depreciation is different for different countries.
In India NDP is announced by the Ministry of Commerce and Industry.
🔸️3. GNP (Gross National Product)
It is the GDP of a country added with itsincome from abroad.
GNP= GDP + Income from Abroad
Or,
GNP = GDP – Income from abroad
Income from abroad= trade balance + interest on External Loans+ Private Remittance
Private remittance= inflows and outflows on account of private transfer e.g. NRI
Trade balance = net outcome at the year end of the total import and export.
Interest on external loans= balance of the inflow of interest payment (on money lend out of economy) – outflow of interest payment (on the money borrowed by the economy)
In case of India, GNP is negative. This is because of heavy outflows on account of Trade Deficit and interest payment on foreign loans.
🔸️Use of GNP:
GNP is the “national income” according to which IMF ranks nations based on PPP or Purchasing Power Parity. [India ranked 4thafter USA, Japan and China]
It is indicative of the qualitative as well as quantitative aspect of the economy.
🔸️4. NNP or Net National Product
NNP= GNP – Depreciation
Or,
NNP= GDP+ income from abroad- depreciation
NNP or Net National Product is the purest form of Income. It is the National Income or NI.
We can find the per capita income of a country if we know the NNP and total population.
e.g. (NNP/ total Population) = per capita income
Banking Awareness
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Expand ASBA:Ans: Application Supported by Blocked Amount
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Fastest mode of transaction: Ans: RTGS
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First Indian Bank to introduce credit card: Ans: Central Bank of India
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Fixed Deposit (FD)Account may be opened for a minimum period of: Ans: 7 days
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Fixed deposits and recurring deposits are: Ans: repayable after an agreed period
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Forward Market Commission merge with: Ans: SEBI
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Full form IFSC – Ans: Indian Financial System Code
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Full form of CASA –Ans: Current Account Saving Account
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Full form of CVV: Ans: Card Verification Value
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Full form of EFT: Ans: Electronic Fund Transfer
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Full form of REIT:Ans: Real State Investment Trust
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How much amount of money can RBI lend to a bank? Ans: 2% of NDTL
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How much amount RBI allows in 'Tap and pay'transactions without PIN? Ans: Rs. 2000
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How much fee charged to file a complaint under Banking Ombudsman? Ans: Banking
Ombudsman does not charge any fee
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How much overdraft facility to be provided in 'Pradhan Mantri Jan Dhan Yojana'
scheme? Ans: Rs. 5,000
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If a cheque is postdated, the bank on which it is drawn: Ans: will not honour the cheque
before the date of the cheque
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If any customer is not satisfied by the decision of Banking Ombudsman, customer can
appeal against the award before the appellate authority within how many days from the
date of receipt? Ans 30 days
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If RBI reduces CRR, what happens: Ans: Credit Supply increases, loans get cheaper.
222 IFRS full form:Ans: International Financial Reporting Standards
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IFSC code consists of _____ alpha numeric code. Ans: 11 digits (The IFSC is an 11 digit
alpha numeric code, with the first four digits identifying the bank, fifth is numeric(kept
0) and the last six digits represent the bank branch.)
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IMPS - Immediate Payment Service is an interbank electronic instant mobile money
transfer service through mobile phones in India, the facility is provided by: Ans: NPCI
(National Payment Corporation of India)
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In a bank, which of the following are the usual types of accounts? Ans: Current
accounts, Savings bank accounts and Term deposit accounts
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In banking business, when the borrowers avail a term Loan, initially they are given a
repayment holiday and this is referred as: Ans: Moratorium
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In BSBDA (Basic Savings Bank Deposit Account) the balance at any point of time does
not exceed rupees: Ans: Rs. 50,000
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In BSBDA (Basic Savings Bank Deposit Account) the credits in a financial year does
not exceed rupees: Ans: Rs. 1 lakh
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In BSBDA (Basic Savings Bank Deposit Account) the withdrawals and transfers in a
month does not exceed rupees: Ans: Rs. 10,000
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In CBS, C stands for: Ans: Core
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In CRAR, A stands for: Ans: Assets (Capital to Risk Weighted Assets Ratio)
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In India, one- rupee coins are issued by: Ans: Govt. of India
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In what denominations Commercial Paper (CP) can be issued? Ans: Rs. 5 lakh
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In which of the following fund transfer mechanisms,can funds be moved from one bank
to another and where the transaction is settled instantly without being bunched with any
other transaction?Ans: RTGS
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Increased interest rates, as is existing in the economy at present will: Ans: mean higher
cost of raw materials
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PIN is a number allocated to an individual and used to validate electronic transactions.
●Expand PIN:Ans: Personal Identification Number
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Pradhan Mantri Jan Dhan Yojana' is a Scheme for: Ans: Financial inclusion
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Prime Lending Rate is replaced by: Ans: Base rate
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Purpose of starting Minor account for 10 years children: Ans: Financial inclusion
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RBI established on: Ans: April1, 1935
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RBI extended the timeline for full implementation of Basel III norms till: Ans: 31 March
2019
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RBI gave in-principle for Banking license to: Ans: IDFC and Bandhan
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RBI lifted a ban on carrying Indian bank notes of Rs1,000 and Rs. 500 denominations to
and from:Ans: Nepal and Bhutan
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RBI measure to liquidate the market: Ans: Repo rate.
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RBI nationalized in: Ans: January 1, 1949
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RBI policy related to money laundering? Ans: Know Your Customer
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Regulator of Capital Market in India:Ans: SEBI
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Regulator of Micro, Small and Medium enterprises in India: Ans: SIDBI (Small
Industries Development Bank of India)
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RuPay Card is an Indian version of credit/debit card is launched by which organization:
Ans: NPCI (National Payments Corporation of India)
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Short term Money lending process is known as: Ans: Call Money
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SLR ((Statutory Liquidity Ratio)is the amount a commercial banks needs to maintain in
the form of _______before providing credit to its customers. Ans: cash, or gold, or govt.
approved securities (Bonds)
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Special Drawing Right (SDR) is a monetary unit of: Ans: IMF
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Teaser rates are related to which type of loans: Ans: Home loans
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The Banks has converted all ‘no - frills' accounts’ into: Ans: Basic Savings Bank
Deposit Accounts
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The Central Bank of India has adopted new measure of inflation: Ans: Consumer Price
Index (CPI)
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The holidays for the banks are declared as per: Ans: Negotiable Instruments Act
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The maximum deposit amount insured by DICGC? Ans: Rs. 1 lakh per depositors across
all banks
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The most powerful tool used by the Reserve Bank of India to control inflation is to: Ans:
raise interest rates
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The MUtual funds in India follow accounting standards laid by: Ans: SEBI (Securities and Exchange Board of India)
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Know Your Customer (KYC) guidelines are issued under: Ans: Section 35A of the
Banking Regulation Act, 1949
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Loans of very small amounts given to low income groups is called: Ans: Micro Credit
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MICR code consists of how many digits?Ans: 9 digits.(First three digits denotes city,
next three digits representing the bank and the last three digits representing the bank
branch)
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Minimum & Maximum Limit of NEFT: Ans: no limit
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Minimum amount for Certificate of Deposit has been fixed at: Ans: Rs. 1 Lakh
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Minimum capital requirement for Foreign banks that want to set up operations in India
is: Ans: Rs. 500 crore
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Minimum capital requirement for new banks in private sector is: Ans: Rs. 500 crore
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Minimum capital requirement for Non-Banking Financial Company (NBFC) is: Ans: Rs.
500 crore
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Minimum limit for medium scale enterprises is Rs. 5Cr. what is maximum limit? Ans:
10 Cr.
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Mobile banking fund transfer limit in a day: Ans: Rs. 50,000
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Mutual funds regulated by: Ans: SEBI (Securities and Exchange Board of India)
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Name the scheme to include every people under banking system: Ans: Financial
Inclusion
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NEFT and RTGS in banking terminology speak of: Ans: electronic fund transfer from
bank to bank
● Pension scheme for unorganized sector:Ans: Swavalamban
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The NBFCs are allowed to accept/renew public deposits for a minimum period of:Ans:
12 months ( and maximum period of 60 months)
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The objective of KYC guidelines is to prevent banks from being used, intentionally or
unintentionally, by criminal elements for money laundering or terrorist financing
activities. What is the full form of KYC? Ans: Know Your Customer (KYC)
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The ownership of public sector banks rests: Ans: jointly with the Government of India
and the shareholders from the public
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The RBI policy rate which is purely an indicative rate used by RBI to signal long – term
outlook on interest rates is: Ans: Bank rate
●The seed capital of Bhartiya Mahila Bank is: Ans: Rs.1000 crore
● The sole authority to issue and manage currency in India: Ans: RBI
●The term ‘pre – shipment’ finance relates to: Ans: export credit
● The term “Smart Money” refers to: Ans: Credits Card
●Treasury bill tenure:Ans: 91 days, 182 days, 364 days
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Treasury Bills and Certificate of Deposit are considered as the ____instruments.Ans:
negotiable money market
●Treasury bills are available for a minimum amount of:Ans: Rs. 25,000
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Under which service, customers may access their bank account and perform basic
transactions from any of the member branch offices. Ans: Core Banking Solution (CBS)
● What does CAR stands for? Ans: Capital Adequacy Ratio
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What is ‘Demat Accounts’? Ans: Accounts in which shares of various companies are
traded in electronic form
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What is Bancassurance? Ans: The selling of life assurance and other insurance products
and services by banking institutions.
● What is full form of CTS? Ans: Cheque Truncation System
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What is Repo rate? Ans: It is the rate is the rate at which RBI lends money to the
commercial banks.
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What is Stale Cheque? Ans: A cheque which is presented to a bank after 3 months from
date of issue is considered as stale cheque and will often not be honored for cash or
deposit at a bank.
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What is Teaser loan? Ans: If a bank offers a slightly lower rate in the initial years and
higher rate in later years, it is called a teaser loan.
●What is the full form of MTSS? Ans: Money Transfer Service scheme
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What is the loan limit for education under priority sector for studies abroad? Ans: Rs. 20
lakh (Loans to individuals for educational purposes including vocational courses upto
Rs.10 lakh for studies in India and Rs. 20 lakh for studies abroad are included under
priority sector.)
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What is the maximum amount per transaction NEFT limit for cash-based remittances to
Nepal? Ans: Rs. 50,000
●What is the minimum amount required to open a Fixed Deposit (FD)? Ans: Rs.1000
● What is the minimum denomination of Treasury bills to issue in India? Ans: Rs. 25000
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What is the minimum paid-up capital requirement of both small banks and payments
banks in India? Ans: Rs. 100 crore
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Exchange of cash flow in different currency is known as: Ans: Currency Swap
▶Banking Interview questions and answers
》Why should this bank hire you?
Focus on specific experience and training in your career history.
Emphasize what qualifies you for this banking job and how you can add value to both the position and the bank. Look at the banking job requirements such as accuracy, customer care, computer skills, numeracy skills and communication skills. Highlight how you have demonstrated these skills previously.
》If there are areas of the job function that you do not yet have experience in, then highlight what skills you have that will facilitate learning and performing these tasks.
For example your ability to remain calm under pressure and communicate clearly will help you in dealing with customers. Emphasize qualities like loyalty, integrity, confidentiality and commitment. State your technical knowledge and confirm your understanding of the basics of bank products and services.
》Tell me about a situation where you had to deal with an angry customer.
Customer service skills are essential for any frontline banking job. Your example should display good listening skills, the ability to clarify the customer's needs and to respond with patience and empathy.
Show how you develop positive customer relationships by trying to meet the customer's expectations and taking responsibility for the customer's satisfaction. Find out more about customer service job interview questions and answers and be well prepared for any customer service orientated interview questions.
Bank job candidates may be asked to define good customer service in order to evaluate their customer service orientation.
》Tell me about a time where you had to use your discretion and tact to do your job properly.
You are often required to display diplomacy and tact with customers in a banking environment. Provide an example of a challenging situation where you had to handle the customer carefully and with discretion. Discuss how you used your sensitivity and communication skills to manage the situation.
》How do you check your work for accuracy?
In asking bank interview questions about your attention to detail and accuracy the interviewer wants to know if you are able to accurately carry out your tasks with close attention to all aspects of your work.
》Provide specific examples of how you check your outputs for accuracy and completeness and what you do if you find a mistake.
》Tell me about a time you had to explain a process or situation to a confused customer. How did you approach this?
Banking means dealing with a variety of people. The ability to adjust to the customer and the situation is an important job requirement. Your example should clearly indicate how you changed your communication style to meet the customer's needs.
》Tell me about a time you felt pressured by conflicting work demands, how did you respond?
Staying calm under pressure is a key requirement of working in the front line of a bank. Your ability to maintain performance under stress and to use appropriate coping techniques should be demonstrated.
Discuss the resources you use to meet the different work demands including prioritizing, planning, scheduling and asking for assistance when appropriate.
》Tell me about a time you saw a co-worker do something that you didn't think was appropriate. What did you do?
Integrity and honesty are core to a banking job. Focus on taking immediate action and using the right resources to deal with the problem. Emphasize your commitment to adhering to company policies and regulations. Your judgment is also under scrutiny here so describe your motivation to take action.
》How many scheduled days have you missed during the last four months?
Bank interview questions will explore your reliability. Be honest about this as it can always be verified with a reference check. Focus on your reliability, punctuality and your willingness to work extra hours if needed.
》What are the most important qualities for a bank teller job?
Bank interview questions like this are asked to exploreyour understanding of banking job requirements. Focus on technical skills such as numeracy, computer literacy and product and services knowledge. Discuss key job competencies including accuracy, customer service orientation, judgment, integrity, reliability and the ability to cope under pressure. Point out your strengths as they relate to these qualities.
》What made you decide to work for this bank?
This is your opportunity to shine. Do your homework and research the bank before your interview. Make a list of three or four reasons why this is the right bank for you. Use the resources at preparing for a job interview to help you with this.
》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 of demonetization is remonetization where a currency unit is restored as legal tender.
Described as India’s Surgical Strike on Black Money, demonetization was done to counter parallel economy, counterfeit notes in circulation, and terror financing.
》Some important facts regarding this demonetization.
▪Old 500 and 1000 notes aka Specified Bank Notes (SBN) were banned on the midnight of 8th Nov, 2016. Rs 100, 50, 10 and coins of all denominations remained a legal tender.
▪All banks were closed on 9th Nov, 2016 for public.
▪ATMs were closed on 9th and 10th Nov, 2016 for recaliberation.
▪Cash Limit through Bank counters was Rs. 10000/- daily and 20,000/- Weekly. This was later increased to 24,000/- weekly for Savings Accounts and 50,000/- for current Accounts.
Later, all legal tender (2000, 100, 50, etc notes) deposited in the account could be withdrawn without limit. But old 500 and 1000 notes (SBN) deposited could be withdrawn subject to 24,000/50,000 limit.
▪Cash Withdrawal Limit was initially 2000 INR daily. Later increased to 2500/- daily limit.
▪Exchange up to Rs4,500 in old Rs1,000 and Rs500 notes could be done at banks and post offices. Subsequently, the amount was reduced to Rs2,000. And later, the exchange scheme was withdrawn on 24th Nov , 2016. ▪Valid ID proof such as Adhaar, PAN card or voter ID card was a must for exchange.
▪People unable to deposit old SBN notes in banks can exchange at RBI till 31st March 2017 after filling a declaration form.
》What are Small and Payment Banks?
Ans. The main purpose of the small banks is to provide basic banking products such as bank deposits and credit, but in a limited area of operation. Small Banks intend to improve financial inclusion by providing credit to small farmers, micro & small industries, and other unorganized sector entities through high technology-low cost operations.
The main objective of Payments Banks is to increase financial inclusion by providing Small Savings Accounts, Payment or remittance services to low income group people. No credit facilities like loans, credit cards, etc will be provided by Small Banks. A maximum of 1 Lakh INR can be deposited in such accounts.
》What is a Non-Banking Financial Company (NBFC)?
Ans. Non-banking financial companies aka NBFCs are financial institutions that provide banking services, but do not hold a banking license. These institutions can’t take deposits from the public. They also can’t issue cheques drawn on themselves; as they do not come under Payment and Settlement System. However, these institutions performs all operations under the ambit of banking regulations.
¤PS: NBFCs are not insured by DICGC (Deposit Insurance and Credit Guarantee Corporation)
》what is Bitcoin?
Ans. Bitcoin is a type of digital money. It’s decentralized peer-to-peer payment network. In other words, it is powered by its users with no central authority.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.
¤PS: Mutual funds, hedge funds and pension plans are all run by asset management companies.
》What is the difference between Nationalized bank and Private Bank ?
Ans. A Nationalized bank is one that was once owned privately, but were later brought under government’s control. This was carried out in two phases. One in 1969 when 14 banks were nationalized. And the other in 1980 when 6 more banks were brought under govt’s control. A private bank is a bank that is still privately owned.
¤PS: There’s a difference between Nationalized Banks and Public Sector Banks. Cross Question on how many nationalized banks are there?
》What are Basis Points?
Ans. BPS is an acronym for basic points and is used to indicate changes in rate of interest and other financial instruments.
¤PS: 1 basis point change corresponds to 0.01% change. So when we say that repo rate has been increased by 25 bps, it means that the rate has been increased by 0.25%
》 What are Treasury Bills?
Ans. Treasury bills ( a.k.a T-Bills) are the short term money market instrument (bonds) issued by central government through auctions. These T-Bills can be issued for 91 days, 182days, or 364 days.
¤PS: There are no T-bills issued by state government. From 1st April, 1997 T-bills have been replaced with Ways & Means Advances
》What are Commercial Papers?
Ans. Commercial papers are short term money market instrument (debts issued in the form of promissory note) by corporate, primary dealers, or financial institutions. The maturity period of commercial papers can range from 7 days to 1 year from the date of issuance.