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Banking_Pro_Interview_Answers

The document provides a comprehensive overview of banking, detailing the functions of banks, their role in the economy, and the structure of the Indian banking system. It covers key regulations, types of banking products, credit risk management, and the impact of technology in finance, including FinTech and cryptocurrencies. Additionally, it emphasizes the importance of customer service and relationship management in banking.

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13 views4 pages

Banking_Pro_Interview_Answers

The document provides a comprehensive overview of banking, detailing the functions of banks, their role in the economy, and the structure of the Indian banking system. It covers key regulations, types of banking products, credit risk management, and the impact of technology in finance, including FinTech and cryptocurrencies. Additionally, it emphasizes the importance of customer service and relationship management in banking.

Uploaded by

ashisghadai02
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Detailed Interview Answers for Banking Pro Curriculum

What is a Bank?
A bank is a financial institution licensed to receive deposits, provide loans, and offer various
financial services such as wealth management, currency exchange, and safe deposit boxes.
Banks play a crucial role in the economy by facilitating financial transactions and providing
liquidity to businesses and consumers.

Banking Functions
Banks perform various functions like accepting deposits, granting loans and advances,
facilitating payments and settlements, providing investment services, and offering financial
advisory services. These functions help support economic growth and financial stability.

Role of a Bank in an Economy


Banks are vital to the economy as they mobilize savings, provide credit to businesses and
individuals, enable financial transactions, support investment, and facilitate economic
development by ensuring liquidity and capital formation.

Overview of Indian Banking System


The Indian banking system consists of the Reserve Bank of India (RBI) as the central
authority, public sector banks, private sector banks, cooperative banks, regional rural
banks, and payment banks. It is regulated by various bodies to ensure financial stability and
consumer protection.

Economics of Money and Banking


This concept covers how money functions in the economy, the supply and demand of
money, how banks create credit, and the overall impact of banking operations on economic
growth and inflation.

Regulations
Regulations in banking ensure that financial institutions operate safely and soundly,
protecting depositors' interests. Key regulations include the Banking Regulation Act, RBI
guidelines, and compliance with AML and KYC norms.

Banking Regulation Act


The Banking Regulation Act, 1949, governs the regulation of banks in India, setting
guidelines for licensing, management, operations, and supervision of commercial banks by
the RBI.
RBI, SEBI, PFRDA, IRDA, AMFI
These are regulatory bodies overseeing various financial sectors. RBI regulates banks, SEBI
manages securities markets, PFRDA oversees pensions, IRDA supervises insurance, and
AMFI governs mutual funds.

AML and KYC


AML (Anti-Money Laundering) refers to laws and procedures designed to prevent financial
crimes. KYC (Know Your Customer) involves verifying customers' identities to prevent
fraud and money laundering.

CASA
CASA stands for Current Account and Savings Account, which are essential deposit products
for banks. CASA deposits help banks manage funds with lower costs due to minimal interest
paid on these accounts.

Fixed Deposits (FD)


FDs are time-bound deposits with banks offering higher interest rates than savings
accounts. They are a secure investment option with guaranteed returns.

Recurring Deposits (RD)


RDs allow customers to deposit a fixed amount regularly, earning interest similar to FDs.
They are ideal for systematic savings.

Unsecured Business Loans


These are loans offered without collateral, including products like personal loans, credit
cards, and small business loans. They are riskier for banks and usually come with higher
interest rates.

Credit Risk Management in Banking


This involves identifying, assessing, and mitigating the risk of borrowers defaulting on
loans. Banks use credit scoring, collateral, and strict lending guidelines.

Mortgage Loans
Mortgage loans are secured loans where real estate property is used as collateral. Common
examples are home loans.

Automobile Loans
These loans help customers finance the purchase of vehicles, repayable in monthly
installments with fixed or floating interest rates.

Business Banking
Business banking provides financial services to businesses, including loans, credit, cash
management, and investment services.
Project Finance
Project finance involves funding large-scale infrastructure or industrial projects, often
based on the projected cash flows of the project.

Syndicate Loans
Syndicate loans are large loans provided by a group of lenders to share risk and provide
significant capital to borrowers.

Foreign Trade Financing


This supports businesses involved in international trade through services like bills of
exchange, letters of credit, and foreign currency transactions.

NRE, NRO, and FCNR Accounts


These are accounts designed for Non-Resident Indians (NRIs). NRE accounts are for foreign
income, NRO accounts handle Indian income, and FCNR accounts hold foreign currency
deposits.

Capital Market
The capital market is a financial market where long-term securities like stocks and bonds
are traded to raise funds.

Digital Enablers in Banking


Digital enablers include mobile banking, internet banking, UPI, and digital wallets, providing
customers with seamless, secure, and efficient banking services.

What is FinTech?
FinTech refers to innovative technology used to improve and automate financial services,
including online banking, digital payments, and blockchain technology.

Cryptocurrencies and Blockchain


Cryptocurrencies are digital currencies secured by cryptography. Blockchain is the
technology behind cryptocurrencies, ensuring secure and decentralized transaction
records.

Sales and Relationship Management


Sales and relationship management in banking involve understanding customer needs,
offering suitable products, and maintaining long-term relationships through exceptional
service.

SPANCO
SPANCO is a sales process: Suspect, Prospect, Approach, Negotiate, Close, and Order. It helps
in managing sales systematically.
Importance of Customer Service
Good customer service enhances customer satisfaction, builds loyalty, and drives business
growth by meeting customer expectations efficiently.

Relationship Management
Relationship management involves maintaining positive interactions with clients,
understanding their needs, and offering tailored financial solutions to retain business and
grow revenue.

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