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Komal @Eduncle posted an Article
August 17, 2019 • 2:22 pm

Banking Interview Preparation Concepts to Avoid Rejection – Part 3

Banking Interview Preparation

 

 

Bank Interview Concept! We have already discussed the Principle of Core Banking in the first part and basic information of Bank Functions, Accounts, Cheques & Risks in part 2.

 

When you go to the interview round, you do not have much time to give the answers. Your brain must be prepared for quick action. It means you should know exactly what you will answer and what they can ask in a banking interview.

 

Eduncle hopes so, you have an idea which topics are asked in Banking Interview round which are described in part 1. Now, it’s time to focus on one of the most important topics i.e. the Reserve Bank of India (RBI). You should know everything about the RBI before appearing the Banking interview to avoid rejection.

 

After the resignation of RBI Governor Dr Urjit Patel, it has become even more important to keep an eye on latest happening in the RBI world. Now, Shaktikanta Das has joined RBI as 25th RBI Governor.

 

There are many questions asked in bank Interview regarding RBI such as: -

 

When RBI was established?

When Was RBI Nationalized?

What does RBI do?

What are the policy rate and reserve ratio of RBI?

 

Let’s dive right in!

 

 

History About RBI (Reserve Bank of India)

 

9C5161A8Many candidates don’t know about the difficulty level of Banking Interview. They only prepare the current GK and superficial banking details. Most of the candidates miss some very important points such as the central bank of India and its history. According to the Bank aspirants who shared their interview experiences, some questions are asked from RBI’s History. So, before appearing in Banking Interview Exam, you must know the brief introduction of Reserve Bank of India.

 

 Reserve Bank of India is the central bank of India which manages the financial stability and economy of India.

 It was established on 1st April 1935 in accordance with the Reserve Bank of India Act 1934.

 At first, the head office of RBI was in Calcutta which was permanently moved in 1937 to Mumbai.

 RBI was nationalised in 1st January 1949 after India’s Independence.

 It is the first bank of India which is fully owned by the Government of India.

 

Know More About RBI’s History

 

 

The Preamble of Reserve Bank of India

 

The preamble of RBI describe exactly “To regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage, to have a modern monetary policy framework to meet the challenge of an increasingly complex economy, to maintain price stability while keeping in mind the objective of growth.”

 

 

Functions of RBI - What is the Role of RBI?

 

RBI plays an important role in the banking sector. Here we have mentioned some important functions of RBI. If you want to know in detail then download the PDF – Functions of RBI

 

 

Evolution of Central Banking & Reserve Bank of India

 

Evolution of Central Banking

 Legal Framework for Reserve Bank functions

 

 

Price Stability

 

 Monetary Policy Framework

 Market Operations

 

 

Financial Stability

 

 Regulation of the Financial System

 Regulation of Commercial Banks

 Supervision of Commercial Banks

 Regulation & Supervision of Co-operative Banks

 Regulation & Supervision of Non-Banking Financial Companies

 Development and Regulation of Financial Markets

 Regulation of Financial Market Infrastructure

 

 

Currency and Banking Functions

 

 Currency Management

 Banker to Banks

 Banker to Government

 Public Debt Management

 Understanding Reserve Bank's Balance Sheet

 

 

Foreign Exchange – Management & Reserves

 

 Foreign Exchange Management

 Foreign Exchange Reserve Management

 

 

Developmental Functions

 

 Consumer Education and Protection

 Financial Inclusion and Development

 Development of Institutions

 

 

Download Complete Banking Interview PDF Here

 

 

Organisational Structure of RBI

 

RBI has a central board of directors. It is the main governing body of RBI. It consists of: -

 

One governor which is appointed by the government of India.

 Four deputy governor comes under the governor.

One is the chairperson of public sector bank.

Second is the chairperson of RBI

Third is economists.

Last is a banker of repute.

 It has four more directors representing the regional boards at Mumbai, Chennai, Kolkata, and Delhi.

 One representative from the finance ministry. It has 10 government-nominated directors representing various fields of economy.

 

Thus, there are twenty persons in the central board. The organisational structure of the Reserve Bank of India is as under:

 

Organisational Structure of RBI Infographic

 

Know More About RBI Organisational Structure

 

 

Governors of Reserve Bank of India

 

Since the establishment of RBI, 25 governors have been appointed by the government of India. Indian currency is issued after the signature of the RBI Governor. The first RBI governor was Sir Osborne A. Smith from 1st April 1935 to 30th June 1937. We have mentioned the last five RBI Governor name in the table below: -

 

S.No. Name (Term of Office) Photos
1. Bimal Jalan (22nd Nov 1997 - 6th Sep 2003) 9C5161A85
2. Y. V. Reddy (6th Sep 2003 - 5th Sep 2008) 9C5161A84
3. D. Subbarao (5th Sep 2008 - 4th Sep 2013) 9C5161A83
4. Raghuram Rajan (4th Sep 2013 - 4th Sep 2016) 9C5161A82
5. Urjit Patel (4th Sep 2016 - 10th Dec 2018) 9C5161A81
6. Shaktikanta Das (11th Dec 2018 - Incumbent) 9C5161A86

 

 

Policy Rates and Reserve Ratios of RBI to Control Inflation and Liquidity

 

RBI has decided many Policy Rates and Reserve Ratios to control the inflation and liquidity in the economy. There are 5 Policy Rates and 2 Reserve Ratios are as follows: -

 

 

Reserve Ratios

 

Cash Reserve Ratio

 Statutory Liquidity Ratio

 

 

Policy Rates

 

 Repo Rate

 Reverse Repo Rate

 Bank Rate

 Marginal Standing Funding

 Open Market Operations

 

Know More About RBI Policy Rates and Reserve Ratios

 

 

Other Questions Asked About RBI in Banking Interview

 

There are many other questions asked in Banking interview regarding RBI and its role and responsibilities. You must know about these questions to avoid rejection in banking interview.

 

 

RBI as Banker to Government

 

What is RBI's role with regard to the conduct of Government's banking transaction?

How does the Reserve Bank of India discharge its statutory obligation of being 'Banker to Government'?

How payment into government account is made?

When is the receipted challan for payment made into government account made available?

What if the Receipted Challan is misplaced?

Are agency banks compensated for the conduct of Central/State Government banking?

What is RBI’s role in Goods and Service Tax regime?

How the Non-Tax receipts of government effected digitally?

 

The official website of RBI provided the answers of all the above questions. You can check and learn from RBI as Banker to Government.

 

 

Reserve Bank’s Instructions on Banking matters

 

RBI issue many instructions for deposit accounts, loans, interest rate and other banking-related matters. Many candidates are rejected in the interview round because they don’t know about these Instructions which are used in banking matters.

 

Whether banks can accept interest-free deposits?

What rate of Interest is paid by banks on savings bank accounts?

How is the computation of interest on savings bank deposits done by banks?

How banks can pay interest on term deposits repayable in less than three months or where the terminal quarter is incomplete?

Whether banks can pay differential rates of interest on term deposits aggregating Rs.15 lakh and above?

Whether banks are permitted to offer a differential rate of interest on NRE deposits?

Whether the concessional rate of interest is applicable when a loan against FCNR(B) deposit is repaid in foreign currency?

Whether banks can accept recurring deposits under the FCNR(B) Scheme?

Whether banks are permitted to offer a differential rate of interest on FCNR(B) deposits?

Whether FCNR(B) deposits can be renewed with retrospective effect (i.e. from the maturity date)? If yes, what is the rate of interest payable?

 

Answer of all the above questions – Reserve Bank’s Instructions on Banking matters

 

We hope, now have an idea about Banking Interview questions regarding RBI. However, if you have any doubt regarding this page, you can ask our experts through the comment box. We will definitely try to solve your queries as soon as possible.

 

If you found this article helpful, then share with candidates who are preparing for IBPS Interview.

 

In the next part, we have described the financial system of the bank. So, stay connected with Eduncle to avoid rejection in banking interview.

 

Click Here to Read Part 2                                                            Click Here to Read Part 4