Nabard grade A and B interview questions

1. Why do you want to join banking sector? (Most Important Question in a Bank Interview)

Banking is one of the fastest growing sectors in India with more stable and high growth and more

over providing a wide range of career opportunities for graduates.

So I want to take an opportunity to join in a bank.

If you have any other specific reason you must convey that.

2. What is the difference between Cheque and Demand Draft?

Cheque: Cheque is a negotiable instrument instructing a bank to pay a specific amount from a specific account held in the maker/depositor name with that Bank.
Official definition of a Cheque - "an order to a bank to pay a stated sum from the drawer's account, written on a specially printed form."

Demand Draft: A demand draft is an instrument used for effecting transfer of money. It is a negotiable instrument.
Official Definition of Demand Draft - "a financial draft payable on demand."

All you need to know about Cheque. What is Cheque?-Defination - Kinds and Type of Cheques--> Read more here.

3. What is Private Banking?

Banking services offered to high-net-worth individuals.
Private banking organization assists the high-net-worth individual in investing his money in exchange for fees or commissions.
The term "private" refers to the customer service being executed on a more personal basis.

HSBC Recently closes its Private Banking operational unit in India, So this is an importantquestion to be asked in Bank Interview.

4. What is NBFC? (Non-Banking Financial Company)?

A Non-Banking Financial Company (NBFC) is a financial institution that provide banking services but do not hold a banking license. NBFC also cannot accept demand deposits, unlike banks, do and they do not form part of the payment and settlement system.

These institutions are not allowed to take deposits from the public.

Nonetheless, all operations of these institutions are still covered under banking regulations.

Every NBFC should be registered with RBI and obtain its certificate of registration.

They also cannot issue cheques, like banks do.

A non-banking institution which is a company and has a "principal business" of receiving deposits under any scheme or arrangement is also a non-banking financial company.

5. NBFCs are doing functions similar to banks.What is the difference between banks & NBFCs?

As of now you must know what is NBFC? you must also know its different from a bank.  

NBFCs lend and make investments and hence their activities are akin to that of banks. However, there are a few differences between NBFC and banks.

A. NBFC cannot accept demand deposits.

B. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.

C. Account deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to depositors of NBFCs, unlike in the case of banks.

6. What is BSBDA?

Any individual, including poor or those from weaker section of the society, can open zero balance account in any bank.
BSBDA guidelines are applicable to "all scheduled commercial banks in India, including foreign banks having branches in India".
Now old "No- frills ' account --> BSBDA account.

Basic Savings Bank Deposit Account (BSBDA) should be considered as a normal banking service available to all customers, through branches.

The aim of introducing 'Basic Savings Bank Deposit Account' is very much part of the efforts of RBI for furthering Financial Inclusion objectives.

7. What is Base Rate?

It is the minimum rate of interest that a bank is allowed to charge from its customers.
this base rate is generally used as a benchmark for interest rates. 
RBI set this minimum interest base rate below which bank are not allowed to lend to its customers.

However, all existing loans, including home loans and car loans, will continue to be at the current rate.

8. What is KYC?

      

Know your customer (KYC) is the process of a business verifying the identity of its clients. The term is also used to refer to the bank regulation which governs these activities.

The Reserve Bank of India (RBI) has advised banks to follow KYC guidelines, wherein the certain personal information of the account-opening prospect or the customer is obtained. The objective of doing so is to enable the Bank to have positive identification of its customers.  This is also in the interest of customers to safeguard their hard earned money.

The purpose of KYC is to limit the risk and prevent money laundry activities.

KYC is one time exercise while dealing insecurities markets - once KYC is done through an SEBI registered intermediary (broker, DP, Mutual Fund etc), you need not undergo the same process again when you approach another intermediary.

  Documents required to mandate KYC norms bank requires collecting three proofs from their customers. They are-         

Proof of identity

Proof of address
Photograph.

KYC is now international activity and all major economies follow the KYC guidelines and made it mandatory.

9. What is the Subprime crisis?

The current Subprime crisis is due to sub-prime lending. These are the loans given to the people having a low credit rating. 
In simple terms, giving credit to people to buy homes, knowing that they will never be able to pay it back.
In reality basically greed caused the sub-prime crises. (Don't say this Interview)
Here below, is the best video explanation for subprime crises available on the internet. Watch over the with the unlimited pack of the internet as you may screw your data plan for this 11 min long video.

10. What is BPS? (Basis Points)?

BPS (Basis point): - BPS is an acronym for basic points  is used to indicate changes in the rate of interest and other financial instruments.

  -:-     1 BASIC POINT IS EQUAL TO 0.01% 

So when we say that repo rate has been increased by 25 bps, it means that the rate has been increased by 0.25%.

As bank interview is just like a regular interview where interviewer wants to know about you. So just be relax and open your views whatever they asked to you this is your bank interview preparation time.