Common Bank Interview Questions and How to Answer Them

May 15, 2024
bank interview questions and answers

Quick Summary

  • Banking jobs have been the aspiration of many candidates. A bank interview is the main step towards procuring a banking job.
  • Along with the general questions like self-introduction, you also need to study the company and answer the questions smartly.
  • Banking job selection is quite tough but is highly rewarding.

Table of Contents

“The Indian banking industry has always been full of competition, and there is enough room for growth.” -Chanda Kochhar

You have quite a higher chance of receiving a job offer regardless of your level of experience if you possess the necessary educational credentials, aptitude, and well-prepared responses to the interviewers’ challenging questions about your in-depth skill set.

You could respond in your banking interview questions naturally and successfully if you have practiced your answers.

The Institute of Banking Personnel Selection, popularly known as the IBPS is an autonomous body. It conducts recruitment examinations for all Public Sector Banks except the SBI. The official IBPS Exam Calendar 2024 has been uploaded to the official website on 15th January 2024.

To help you ace your interview and land the banking job you desire; we’ll go over some commonly asked bank interview questions and answers.

General Banking Questions in Interview

  • Tell me about yourself in brief?
  • From where did you found about this job opening?
  • Why do you want to leave your current profession/job?
  • What interested you to get into the banking sector?
  • What do you think are the key qualities required to be a successful banker?

Read about:
The Key to Answering ‘Why Do You Want to Work Here’

tips for bank interviews

Q1: What motivates your interest in working in the banking industry?

Sample Answer: The banking sector contributes significantly to our economy and is highly rewarding. It provides possibilities for skill and knowledge development as well as challenging positions. I wish to work in the banking industry because of the sector’s dynamism and relevance to the current state of the economy.

Q2: What do you need to open a bank account?

Sample Answer: As per my knowledge of RBI’s KYC procedure, which states that each customer must submit personal documents to prove their identity, address, etc. Specifically, one must submit a PAN or Aadhar card for identity proof. The latter can also be submitted for address proof along with utility bills.

Q3: What does APR mean?

Sample Answer: The interest rate charged for services like credit cards, bank loans, etc. is known as the APR (Annual Percentage Rate).

Q4: What do you mean by Debt-to-Income Ratio?

Sample Answer: Debt to income ratio is an important banking interview questions and answer for freshers. It compares how much one earns vs how much one owes. Here, the basic income of individuals is taken into account, as are the monthly bills like rent and mortgage.

Q5: How would you describe a “crossed cheque”?

Sample Answer: A crossed cheque elucidates the amount that is deposited into a payee’s personal account.

Q6: What is a Line of Credit?

Sample Answer: Anyone preparing for bank interview questions and answers must know what a line of credit is. It is a credit for a flexible loan given by banks to customers. This is for a specific amount and must be repaid immediately with interest.

Q7: What does “loan grading” mean?

Sample Answer: The primary procedure that verifies the key criteria before approving a loan is known as loan grading.

Q8: What is an interbank deposit?

Sample Answer: Next on the list of bank interview questions and answers for freshers are interbank deposits. This is an arrangement between two banks whereby one can hold funds for the other. The bank-to-bank transfer is also used for quick funds and requires opening an account beforehand.

Q9: What do you mean by Non-Performing Assets?

Sample Answer: Among bank interview questions, understanding what non-performing assets are is important. This term refers to a loan for which payment has not been made for over 90 days. Payment, in particular, refers to the principal amount with interest.

Q10: What is the difference between credit and debit cards?

Sample Answer: The first and most basic bank interview question to know is the difference between a debit and a credit card. Debit cards allow withdrawals on funds already deposited by the customer. On the other hand, credit cards allow customers to borrow money that they repay later.

Q11: What is a payroll card?

Sample Answer: A payroll card, another important bank interview question, is a smart card given by employers to employees for wage payments. It is, however, not necessary to have a bank account to use the payroll card.

Q12: What is a home equity loan?

Sample Answer: One of the easier bank interview questions and answers is about a home equity loan. This is a home loan taken out after giving the equity in the home as collateral. Failure to repay the loan entirely means foreclosure of the home.

Q13: What is the Prime Rate?

Sample Answer: Most crucial bank interview questions and answers is the prime rate, which is essentially the interest rate that a bank loans to its favoured credit-worthy customers, and it plays a crucial role for people looking to build a strong credit score. Furthermore, prime rates do vary significantly from one another.

Q14: What are the different methods for transferring money online?

Sample Answer: Currently, in India, there are five major types of transferring money: RTGS, NEFT, UPI, IMPS, and Digital Wallets.

Q15: What are the different roles in a bank?

Sample Answer: This one is for the freshers interview questions and answers, which is broad and must be answered briefly. There are several roles in a bank, like bank teller, banker, loan processor, investment banker, credit analyst, mortgage consultant, etc.

Recommended Read: Pro Tips To Prepare for SSB Interview

Get Paid for Your Knowledge

Q1: What are the different types of commercial banks?

Sample Answer: There are broadly three types of commercial banks.

  1. Public Bank:Public banks are nationalized. The central government has a majority stake in these banks. Examples of public banks are the State Bank of India and the Corporation Bank.
  2. Private Bank: Private banks are under private ownership and management. These banks have limited liability. HDFC Bank, ICICI Bank, and Yes Bank are examples of private banks.
  3. Foreign Bank:As the name implies, foreign banks are banks with branches worldwide. Their headquarters are generally in another country. For instance, American Express Bank and HSBC are foreign banks in India.

Q2: What are the different types of loans?

Sample Answer: Another basic bank interview questions and answers that interview candidates should know is the type of loans available at commercial banks. There are either secured or unsecured loans. For the former, the individual provides security to avail of the loan. Some examples of secured loans are home loans, property loans, loans against insurance, gold loans, etc. Unsecured loans do not require any security. For instance, personal, Flexi, vehicle, and unsecured loans

Q3: What does “balloon payment” mean?

Sample Answer: The balloon payment principle is fundamental to the banking sector. It is a one-time payment made at the end of the loan term that is much larger than all previous payments combined. On instalment loans without a balloon option, the loan balance is reduced through a series of fixed payments. Borrowers can lower their fixed payment amounts using the balloon payment idea in exchange for making a higher payment at the conclusion of the loan term.

Q4: What is amortization and Negative amortization?

Sample Answer: A loan’s total value is divided into a series of tiny, set instalments that must be made to the lender through an accounting practice called amortization. To look at it another way, it is the repayment of a debt in instalments so that its book value is written off over time. Negative amortization occurs when a period’s loan payment is less than the total amount due.

Tips to Crack the Bank Exams 2023

Understand the Syllabus and Exam format

Candidates should think about being familiar with the entire bank exam syllabus as well as the expected order of the questions. Candidates must be reasonably familiar with the format of both the Mains and Preliminary bank tests. This aids candidates in getting ready for bank exams using the most recent bank exam syllabus without skipping any crucial ideas.

Take Coaching

There are specialists who are extremely knowledgeable about the tips that are quite beneficial for the bank examination in a coaching facility. The candidate may find it beneficial to choose to attend a coaching centre for their preparation because these centres offer a crash course in which the applicants are taught shortcuts and strategies for quickly and accurately completing the question papers for bank exams.

Determine Weak Areas and Work on Them

The candidate would be aware of their abilities and weaknesses if they had a thorough comprehension of the bank test syllabus and pattern. This enables the banking hopefuls to emphasize and concentrate on their weak areas.

Solve Mock Tests

Examining past years’ bank exam questions and practice tests always helps a candidate get a better understanding of the key subjects and the format of the bank exam.

Candidates can analyse major things from the perspective of the exam by solving previous year’s questions, which will also help them understand the exam’s standards.

Create Short Notes

As you prepare for the bank exam, make a note of the key subheadings and points for revision.

Explore all about Banking Exams 2024

Pre-interview Advice That Will Be Helpful

Study Up About the Company

It’s critical to comprehend the business and the interviewer’s position within it. Having this knowledge can give you more self-assurance during the interview. Look into the organization’s mission statement and broad goals, in particular, so you can discuss them with the interviewer.

Double-check the Job Description

Emphasize the parts of the test and skills that stand out as being particularly crucial. Think of instances from your recent and present work that meet the requirements.

Prepare Smart Questions for the Interviewers

Employers Favor hiring candidates who ask questions. They want to know how committed you are to working for their business.

Dress Formally

Ask the HR manager about the clothing before the interview so you can prepare correctly.

Related Read: Must Know Interview Etiquette Tips

Perks of Banking Jobs in India

When discussing the benefits of working in a bank, most people think of pay and job security. However, there are many more reasons why graduating students should consider preparing for a banking job.

High Pay Scale

The banking industry probably has some of the best salaries in the country. Even the entry-level jobs at banks are higher than jobs in other sectors. For example, the basic Probationary Officer’s salary in the State Bank of India is INR 41,960/- monthly. There are also regular increments before candidates get promoted.

Secure Job

One of the top reasons why everyone advocates for a banking job is its security. Everyone wishes to be secure in their jobs, and the banking sector provides just that. Individuals face bank interview questions and answers for banking jobs and get trained to work no matter the state of the economy. Unless the individual does something illegal or unethical, banking employees rarely lose their jobs.

Prestige

Preparing for bank interview questions and answers, taking examinations, and sitting for interviews before finally landing a bank job takes time and effort. Society and other people realize this and hold bank jobs in high regard. Working in a bank has a social prestige aspect because there are regular salary increments and promotions.

Career Growth

Banking jobs, in general, have a long career path. Once employed, individuals experience stable careers where they can advance to management-level positions. There are also opportunities to transfer between departments. Despite being stressful, most employees will retire from their bank jobs.

Transferrable Skills

Bankers can work in different industries if they so wish. During interviews, banking questions and later training are designed to equip individuals with skills that will work well in other jobs. Some such skills are the ability to look at details, quick decision-making, leadership, and strong communication skills.

Bank Interview Questions and Answers: Key Takeaways

These are the questions and answers that will empower you to easily pass the selection panel and land a job in the banking industry.

Banking jobs are tough to get into and involve several selection process rounds. Here, candidates are asked different bank interview questions and answers to judge their knowledge. Interviewees must aim to gather basic knowledge of the banking industry.

Make sure you carefully explore all your professional options because your career is extremely important. Before making the right decision, look over our career advice.

Frequently Asked Questions

How can I prepare for a bank interview?

Some of the important bank interview questions and answers are:

1. Understand the syllabus and exam format.
2. Determine weak areas and work on them.
3. Create short notes.
4. Solve previous year’s papers.

Can I go for a banking course after the 12th?

Yes, you can opt for a Diploma Banking Courses After 12th Commerce.
Most banking diploma programs are designed for both graduate and 12th grade students. They get valuable skills from this course that are based on an understanding of the banking industry.

What is basic banking knowledge?

A bank is a type of financial institution that accepts public deposits, issues demand deposits, and lends money to its customers all at the same time. These loan activities might be carried out by banks directly or through the capital markets.

What are the commonly asked banking interview questions? 

1. What is a payroll card?
2. What is the difference between credit and debit cards?
3. What is a Line of Credit?
4. What do you mean by Debt-to-Income Ratio?
5. Define amortization.

To read more related articles, click here.

Got a question on this topic?

Related Articles