Banking Interview Preparation Concepts to Avoid Rejection – Part 2




Although many candidates get a good job in their field. However, they are not satisfied. Many questions come in their mind such as: –


What is the best career option for the long-term?


 What will I get in the upcoming 5 years from my job?


 Should I start to study for government exams? If yes, what for?


 How can I work without any interference?


Don’t Worry! it’s time to change your career for the better so that you can get a good career. The answer of all the above questions is only one i.e. Banking Career.


IBPS Exam is one of the ways to get the bank job in India. There are many benefits to working in a bank: –


Provide the best salary of their employees on time.


 Time to time promotions.


 You will work without any interference under the government.


 Bank employees manage the financial system which plays a crucial role to maintain the economy of our country.


 You will get individual growth.


 Daily face new challenges.


 Stable Job.


 If you are selected in IBPS Exam then you will get immediate posting as compared to other exams.



A bank is an institution which provides many services such as accepting fund, loans, ATM, Cheques, bank account, locker facility, fund transfer, passbook, foreign exchange services to their clients at the top end of the market.


Every year, many candidates clear the IBPS written exam, but they are rejected in the interview round. If you are also preparing for the IBPS Interview Exam and want to avoid rejection, then this is the right place for you.


In the previous chapter, we have mentioned the complete details of the Principle of Core Banking. Now we have discussed the basic information of Bank which can be asked in IBPS Interview. You should read further if you are preparing for banking Interview and want to avoid rejection in the final round.


Types of Functions


Types of Bank Account


Types of Risk


Types of Cheque




Types of Functions



There are 2 types of bank functions.


Primary Functions


Secondary Functions



Primary Functions



Primary functions help to manage the economy of the country. It includes accepting deposit and granting loans & advances. The details of primary functions are given below: –


Accepting Deposits


In accepting deposits, banks secure the customers’ money and provide actual investment with interest while customers can get loans through the granting loans function.


 Saving Deposit – It is a personal account in which customers can save their earing and get interest by their bank.


 Fixed Deposit – A person can deposit a fixed amount once for a certain period of time.


 Current Account – It is used for business purpose.


 Recurring Deposit – A person can deposit a fixed amount every month for a certain period of time.


Granting Loans and Advances


 Cash Credit – It is a short-term loan facility which takes for a Home Loan and other property.


 Bank Overdraft – Current account holders can take a loan through Bank overdraft.


 Loans – It is a short-term and long-term facility for various purpose such as education, medical etc.


 Discounting Bills – In daily business, a seller sends bills and seller can get discount through these bills by a bank.



Secondary Function



It is also an important function which provides many other services such as fund transfer, cheque facility, locker facility etc. It is divided into two parts.


Agency Functions


 Funds Transfer


 Cheques Collection


 Periodic Payments/ Collection


 Portfolio Management


Utility Functions


Locker facility


 Underwriting of shares


 Dealing in foreign exchanges


 Project reports


 Social welfare programs



Functions of bank flow chart



Note: – If you want to appear in Banking Exams, then know all the latest news of Upcoming Bank Exam here.




Types of Bank Account



A bank account is a monetary account with a banking institution recording the balance of money for a customer. There are many types of bank account: –


Saving Account


 Current Account


 Recurring Deposit Account


 Fixed Deposit Account


 FCNR Deposit Account


 NRO & NRE Account



Saving Account



Saving account is a most popular kind of individual account in which a person can save money for personal use. It cannot be used for the business transaction. A person can open a saving account single or jointly.


In Saving Accounts, a person needs to keep the minimum balance to maintain these account by the bank. Normally, 1000 INR is required for it, but some banks open it in zero balance. Salary account is an exception in it.


Bank doesn’t allow to do the unlimited free transaction for saving account. An account holder can withdraw 4 times in a month through ATMs without any charge after that bank will charge some fee for it.


Customers receive interest in return from the bank when they deposit their extra money. In India, banks provide the minimum interest of 3.5% and maximum interest of 8%.



Current Account



The current account is just opposite from the saving account. It is used for the business transaction and business purpose only. It doesn’t require to keep a minimum balance in the account and you can make many transactions in a month without any charges through ATM.


In the current account, you will not get any interest. There are two types of current account: –


Individual current account – small business transaction under name of the person.


Corporate current account – big business transaction under the name of the company.



Recurring Deposit Account



When a customer pays a fixed amount every month for a certain period of time, then this type of account is called Recurring Deposit Account. RD account can be opened for a minimum 6 month and maximum 10 years.


There are many benefits to have an RD Account.


Fixed monthly investment option


 Fixed duration of the investment


 Fixed Interest Rate


 TDS (Tax Deducted at Source) not applicable


 Flexibility of investment



Fixed Deposit Account



In this type of account, a fixed amount is paid only once for a certain period of time. You will get a higher rate of interest in FD account as compared to the saving account. In India, you can apply for a loan also against FD certificates. The minimum period of time is 3 months for FD by a resident of India. Many customers open an FD account for TDS.



FCNR Deposit Account



The full form of FCNR Deposit Account is Foreign Currency Non-Repatriable Account. This account is best suited for NRI (Non-resident Indians) and PIO (Person of Indian Origin). It is like a fix deposit account in which NRIs and PIOs can deposit their money in any foreign currency for one to five years. After that, they can receive investment with interest in the same foreign currency.



NRO and NRE Account



NRO is a non-resident ordinary saving account. As per the name both accounts, NRO and NRE can be used by NRI to save their money. But, the difference is their money must be generated from Indian source for NRO Account and for NRE Account, deposit money must be generated from the external source. Customers can withdraw their deposit money only in Indian Currency.







Types of Risk Faced by a Bank



When you go to the IBPS Interview, it can be asked how many types of risk a bank can face? So, we have mentioned all about the risk faced by a bank in the table below: –



Name of Risk Reason to get Risk
Market Risk Instability in Market Value of Marketable Securities.
Interest Rate Risk Fluctuations in Interest Rate.
Foreign Exchange Risk Variation in Exchange Rate.
Operational Risk Failure of Daily Activities, System.
Liquidity Risk Less Cash.
Credit Risk Failure to receive the amount of Credit Cards from the borrower.
Reputation Risk Failure to making a stability of banks’ brand and reputation.
Business Risk No Profit or Loss in Business.
Systemic Risk Cascading Failure which affects the financial system of whole industry
Moral Hazard It occurs when a person takes more risks because someone else bears the cost of those risks.



Also Know: -


 How to Become IBPS PO


 IBPS Clerk Recruitment Exam


 IBPS SO Recruitment Exam


 IBPS RRB Recruitment Exam




Types of Cheques



Generally, a cheque is used by account holders to pay or withdraw a large amount of money. A cheque involves drawer, drawee, and payee. A person who issues the cheque is called drawer while payee is a person or organization who present the cheque for payment. A bank plays an important role as a drawee between the drawer and payee in which drawer has an account.


There are seven types of cheque issued by a bank: –



Open Cheque


A person can issue an open cheque to pay money in cash.





Crossed Cheque


A person can issue a crossed cheque to write an “account payee” between two parallel lines in the left side of cheque.




Order Cheque


A person can issue an order cheque to cross the word “OR BEARER” by a line.




Bearer Cheque


Every cheque is a bearer cheque if it has a word “OR BEARER”.




Post Dated Cheque


A person can issue a postdated cheque to write a future date on the cheque.




Stale Cheque


If a drawer issues a cheque and payee doesn’t pay it after three months of the mentioned date on the cheque also, then this type of cheque is called stale cheque.




Travelers Cheque


It is used by a person who is going to abroad.




In the all above topics bank functions are mostly asked in interview round. We hope, now you are confidently preparing for IBPS Interview. We will provide you the complete details of Reserve Bank of India in our next article.


However, if you have any doubt regarding this article, you can ask our experts through the comment box. We will definitely try to solve your queries as soon as possible. And, if you found this article helpful, then share with candidates who are preparing for IBPS Interview.


Click Here to Read Part 1                                                                                  Click Here to Read Part 3



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