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10 Common Interview Questions and Answers for the Banking Industry

Common Interview Questions and Answers for the Banking Industry

For both newcomers and seasoned professionals, banking offers a wide range of job choices. The interview process, which includes a variety of interview questions, must be passed in addition to the academic credentials and aptitude tests.

A banking position could or might not require experience, but it does require a strong interview performance.

The banking and finance sectors offer a variety of entry points for graduates from different academic disciplines, including corporate banking, customer relationship management, researchers, tax analysts, analysts, etc.

Let’s examine the top 21 banking interview questions and responses in the article that follows so that you can ace the interview.

Top 10 Banking Interview Questions and Answers are:

Question 1: Brief me about yourself?

Every interviewer starts the conversation and gets to know the candidate with this key question. Therefore, always be upbeat and start your introduction by listing your name, education, and any other pertinent details that the interviewer should be aware of. Just finish it in under two minutes to avoid having a long, dull talk.

Question 2: Why do you want to join the banking sector?

Be reasonable in your response to this question and explain how the banking industry has affected individuals by providing all the data you have available to support your claim that it is the industry with the quickest rate of expansion. Don’t begin by saying that you want a secure career or some other aspect of your life. Simply ensure that it is knowledgeable enough to form an accurate evaluation of your response.

Question 3: What are the types of accounts in a bank?

Be direct and begin your response by providing details that can address the interviewer’s query. Bank accounts come in the following varieties:

Checking Account: This account functions similarly to a savings account, however unlike a savings account, it does not accrue interest. There is no withdrawal cap when you create a checking account with a bank, which is a plus.

Money Market Account: This account offers the advantages of both checking and savings accounts. The cash can be withdrawn while still earning higher interest. There is no minimum balance required to open this kind of account.

Account with a certificate of deposit (CD): By establishing such an account, you must make a fixed deposit of funds.

Question 4: What are the necessary documents a person requires to open an account in a bank?

The Know Your Customer (KYC) regulations, which require banks to gather some personal information about account holders, are in accordance with the RBI’s advice to banks. The main documents required to open an account are identification evidence (such as an Aadhar card or Pan card) and address verification.

Question 5: What are the types of Commercial Banks?

Retail or Consuming Bank: A small to medium branch that focuses on serving individual customers rather than corporations or other banks.

Corporate banking, often known as business banking, deals with cash management, stock and bond issuance, financing, and underwriting.

Non-traditional Options: – There are numerous non-banking organisations that provide financial services comparable to those provided by banks. The organisations in question are credit card issuers, credit card businesses, and credit card reporting agencies.

Securities and Investment Banking: Investment banking oversees the management of financial asset portfolios, including those for commodities, currencies, corporate finance, fixed income, debt and equity writing, etc.

Question 6: What is the annual percentage rate (APR)?

The term “APR” stands for annual percentage rate. For using their services, such as loans, credit cards, etc., customers of the bank are subject to a fee or interest. Every year, the interest is calculated.

Question 7: What is Amortization and negative amortization?

Amortization refers to the repayment of the loan by instalment to cover principal amount with interest whereas, negative amortization is when the repayment of the loan is less than the loans accumulated interest, then negative amortization takes places.

Question 8: What is the debt to income ratio?

A loan applicant’s total monthly debt payments are divided by his gross income to get his debt to income ratio.

Question 9: What is loan grading?

Loan grading is the classification of a loan based on numerous risks and criteria, such as the likelihood of payback, the credit history of the borrower, etc. Depending on the loan’s stability and risk, the system assigns it to one to six categories.

Question 10: What do you mean by Co-Maker?

A person who signs a note to guarantee the payment of the loan on behalf of the main loan applicant’s is known as Co-maker or signer.

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