Banking Interview Preparation Tips to Avoid Rejection – Part 4

An Interview is not the stair to getting a bank job. It is all about your personality, knowledge, pressure handling capability and team interaction. If you can make quick decisions in any situation, then your chances get less of being rejected in a Bank Interview.

But a little knowledge is a dangerous thing. When a person gets some knowledge in a particular field, they react as an expert in that field. So, if you are preparing for Bank Interview and want to avoid rejection, you must know everything that can be asked in the Interview about Banks.

We have already given you a road map of the Bank Interview in Part 1. And provided the Basic information on Bank Functions, Accounts in Part 2. Recently we have shared the complete information of the Reserve Bank of India in part 3.  Now, it’s time to focus on the Bank Financial System. How does it work?

In this article, we have discussed the following points: -

Financial Sector

   RBI - Reserve Banks of India

   SEBI - Securities and Exchange Board of India

   PFRDA - Pension Fund Regulatory and Development Authority

   FMC - Forward Markets Commission

   IRDA - Insurance Regulatory and Development Authority

Financial Ratio Analysis with Explanation

   Liquidity Ratios

   Profitability Ratios

   Turnover/ Operational Ratios

   Leverage Ratios

Various Payment Systems in Banks in India 

 

Financial Sector Regulator in India

 

India has five financial sector regulators that maintain the market's financial securities. We have provided a brief description of these financial sector regulators below: -

 

RBI - Reserve Banks of India

 

As you know, RBI (Reserve Bank of India) plays a big role in managing India’s economy and financial stability. It was established on 1st April 1935 as the central bank of India. All the bank (Private & Government) works under the Reserve Bank of India. It has mainly 6 functions: -

 

Evolution of Central Banking

Price Stability

Financial Stability

Currency and Banking Functions

Foreign Exchange

Developmental Functions

 

Since its establishment, the Reserve Bank has been headed by 25 governors. The term of RBI Governor is three years.

Present Governor of RBI – Shakikanta Das

Headquarter – Mumbai

 

Know more About RBI

 

SEBI - Securities and Exchange Board of India

 

The SEBI was established on 12th April 1992 with an act of provisions of the Securities and Exchange Board of India, 1992. The main preamble of SEBI is “To protect the interests of investors in securities and promote the development of, and regulate the securities market and for matters connected therewith or incidental thereto”. 

 

Securities and Exchange Board of India has some important power regarding the stoke exchanges: -

To Stock Exchanges & Intermediaries

To Impose Monetary Penalties

To Initiate Actions in Functions Assigned

To Regulate Insider Trading

Under the Securities Contracts Act

To Regulate Business of Stock Exchanges

 

Present Chairman of SEBI - Shri Ajay Tyagi

 

Head Office - Mumbai, Maharashtra

 

 

Download Complete Banking Interview PDF Here

 

PFRDA - Pension Fund Regulatory and Development Authority

 

The PFRDA was established on 23rd August 2003 by the Government of India. The Preamble of PFRDA is “To promote old age income security by establishing, developing and regulating pension funds and protect the interests of subscribers to schemes of pension funds and related matters”. The Pension Fund Regulatory and Development Authority has one chairperson with three whole-time members.

 

Present Chairman of PFRDA - Hemant G. Contractor

 

Head Office - New Delhi

 

FMC - Forward Markets Commission

 

FMC is also a financial sector regulator of India which was established in 1953 under the provisions of the Forward Contracts (Regulation) Act, 1952. But on 28th September 2015, the FMC was merged with the SEBI.

 

IRDA - Insurance Regulatory and Development Authority

 

It was established in 1999 by the IRDA act of parliament 1999. The main mission of the Insurance Regulatory and Development Authority is “To protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto

 

The Authority of IRDA has ten members team with one chairman five whole-time members and four part-time members included.

Present Chairman of IRDA - Subhash Chandra Khuntia

Head Office – Hyderabad

 

Know More: - Indian Banking and Financial System

 

Financial Ratio Analysis with Explanation

 

A financial ratio is a ratio of calculation and comparison that includes the information of financial statements for any organization. This section is mostly asked in general awareness and Interview rounds. In the banking sector, it is divided into four categories: -

 

Liquidity Ratios

 

As we mentioned in the Banking Interview Guide Part 1, liquidity is an ability that works under a short-term obligation (financial system and solvency). And the Liquidity ratio indicates the current ratio, acid test ratio (Quick Ratio), working capital ratio and cash ratio.

 

 

Profitability Ratios

 

One of the most important questions generally asked in a banking interview is how to calculate profit and its ratio?

The profitability ratio is divided into 5 categories: -

 

 

Turnover/ Operational Ratios

 

You can calculate the turnover ratios in 6 basic ratios: -

 

 

Leverage Ratios

 

It includes 4 basic leverage ratios: -

 

 

Various Payment Systems in Banks in India

 

As you know, India is one of the fastest-growing countries in the banking sector also. There are 130 million cards (Debit Card and Credit Card) issued by the banks. Today, most people use credit card/ debit cards to pay shopping bills, electric bills, immediate cash, etc.

 

Payment and settlement system is used for these financial transactions online. In India, Banks provide you various types of facilities for payment which are completely secure such as: -

Real-time gross settlement (RTGS)

National Electronic Funds Transfer (NEFT)

Nepal Remittance Facility Scheme (NRFS)

Immediate Payment Service (IMPS)

Bharat Bill Payment System (BBPS)

Money Transfer Service Scheme (MTSS)

Aadhar Enabled Payment System (AEPS)

Unified Payments Interface (UPI)

 

Now, at the end of this blog, you are aware of the financial system, ratios, and payment system of banks of India. Questions from these units are generally asked in the Bank interviews. Want to avoid rejection in a banking interview? Then you must know all the details described in our previous parts.

 

You must check our next blogs, where we have discussed mutual funds and priority sectors bank.

 

If you have any doubt about this article, you can ask our experts through the comment box. We will reach out to you soon.

 

Thank You!!

 

 

Click Here to Read Part 3                                                            Click Here to Read Part 5