The banking sector is one of the most reputed and toughest fields to be in. It is the backbone of the economy and due to this reason, it requires competent and skilled people to manage the bank. Moreover, getting a job in the banking sector is not an easy task. Millions of people vying for the same job in the bank with the same expertise, qualifications, aptitude, sincerity, responsibility and dedication that all of it comes down to one thing, how your interview turns out to be.
A job in the banking sector acquires one to be well acquainted with the relevant skills and knowledge. One has to practice many banking interviews questions and answers to clear the interview and land the job of your dreams. That’s why we have shortlisted the most asked and also the unexpected banking interview questions for you to clear the banking interview quickly. All you need to do is to be focused and well-prepared with it. From Axis banking interview questions, HFC banking interview questions to ICICI banking interview questions, Utkarsh banking interview questions, and Kotak Mahindra banking interview questions, we have it all covered.
General questions
1. Why should the bank hire you?
In this question, the interviewer wants to see the qualities that you will highlight. Therefore, it is important to answer this question with specific qualities and an example where you have demonstrated the quality. Talking about your work experience and career history will also give you an advantage. Along with this, emphasize more on the qualities that the banking job you have applied for requires and how can you add value to the organization.
Some of the banking job requirements qualities:
· Customer-centric attitude
· Communication skills
· Technical skills
· Accuracy
2. Have you ever come across a situation where you had to deal with an angry customer? If yes, tell us briefly how you handled it.
In any banking job, it is essential to have good communication and customer service skills. Here the interviewer is trying to check your proactiveness and how calm you can be in various situations such as this. Your example should highlight your good listening skills, ability to clarify the customer's needs, and ability to stay patient and emphatic towards the customer.
One must remember to develop a positive customer relationship by meeting all their needs and expectations and that is what you are supposed to demonstrate to the interviewer.
3. How do you handle the pressure? Have you felt pressured by conflicting work demands, if yes, briefly explain?
Here the interviewer is looking for a person who can stay calm under pressure and doesn’t let the pressure or conflicting work demands affect his/her performance at all. Briefly tell them about the situation emphasizing time management and priorities. Discuss the resources you use to meet the deadlines and also mention that planning and organizing is the key to handling this.
Banking Terms for the interview
One of the essential parts most people forget to practice or revise is the banking terms for the interview. The interviewer looks for an employee whose basics are clear and to test, asking banking terms in the interviews is the best way. Therefore, we have shortlisted some of the common and important banking terms that can be asked
1. What is repo rate and reverse repo rate?
Repo rate is when RBI provides loans to the bank for short-term needs, in this, the RBI takes some interest from the bank, on the other hand, Reverse repo rate is when the bank deposits its excess money in RBI, then RBI provides some interest to the bank.
These two terms are very important to remember as it plays a main role in the banking sector. Moreover, with this, there are terms like the following that can be asked
· CRR
· SLR
· Bank rate
2. What are non-performing assets or NPAs?
Non-performing assets are an asset of a bank that does not produce any income. Banks usually classify any commercial loan as non-performing assets if it is more than 90 days overdue and in the case of consumer loans, it is more than 180 days.
3. Explain the annual percentage rate and how to calculate it?
The annual percentage rate helps the bank to calculate the actual borrowing cost over a particular period. It is expressed in percentage and represents the yearly cost of the loan. To calculate it, the nominal interest rate and all other fees are taken into account. The formula to calculate it is:
APR= [{(Fees+Interest)/Principal}/n]*365*100
4. Provide some examples of banking software applications.
In this question, it is viable to answer the software that you are experienced in. Just in case if the interviewer cross-questions on the software, you will be confident about it.
· Temenos
· Finastra
· BankWare
· CorePlus
· FIS Profile
5. Explain the difference between FDI & FII.
FDI is also called Foreign direct investment. In this, the parent company does an investment in a foreign country. On the contrary, FII also known as Foreign Institutional Investor are funds that are invested in the financial market of a foreign country
Interview questions you can be asked in various banks
1. In the Axis bank interview, what kind of questions can be asked?
Axis bank is the third-largest private sector bank in India. Getting a job in Axis bank is a dream of many but the interview level of the bank is tough. To ensure that you ace the interview, it is essential to practice well enough before the interview. Axis Bank interview questions mostly consist of banking terms, why do you want to join axis and many situational questions that test your creativity, knowledge and dedication towards the work.
2. What expectations do you have with this role and the Bank? (Bandhan Bank interview questions)
Here the interview wants to understand your perspective and knowledge you have regarding the job role and the bank. It gives an idea to the interviewer about your dedication, and how hard are you willing to work for the organization. Therefore, emphasizing your personal and professional gains is essential.
3. Tell us about a decision you made recently and how you reached it in Deutsche Bank?
This was asked in the Deutsche Bank interview questions and thus is an important question. The key here is to show that whatever decision you make is taken with a lot of thought after analyzing all the pros and cons. It is important to explain the logic in this.
4. Have you ever had any disagreement or problem with your previous superior?
When it comes to banks like Kotak Mahindra, Federal banks, ICICI bank, such interview questions are frequently asked. The question is a trap. Through this question, the recruiter checks whether you as an employee will talk about your supervisory ill at all. To ensure you ace the interview, always compliment vote.
5. Why do you want to work in the banking industry?
This is a typical question in bank interviews since the response helps the interviewer understand your motivation for choosing a job.
The importance of the banking industry, its effect, and growth patterns may all be discussed.
Avoid providing personal reasons such as income, reputation, privileges, and so on, and instead, respond with explanations and factual opinions.
For instance: Banking is a profitable business that plays a vital part in our economy. It provides difficult responsibilities as well as possibilities to expand one's skills and expertise
The dynamic aspect of the business, as well as its importance in the economic landscape, is why I wish to work in banking.
These were some examples of Federal Interview questions, Yes Bank interview questions, HDFC interview questions etc.
6. Elaborate on the types of bank accounts that IndusInd Bank offers?
This is from the IndusInd Bank interview question but can also be asked in other banking interviews such as HDFC, Jana small Finance bank interview, Utkarsh bank interview etc.
Here the interviewer wants to check your knowledge about the bank and what kind of amenities it offers. Therefore, it is always important to have thorough research done about the bank before applying. This research should include the kind of amenities it offers, rates, minimum balance and other technical stuff that the position you are applying for might have to deal with.
Here is a sample answer for this question:
· Numerous bank accounts serve diverse purposes to suit the needs of the account user. The following are the five most regularly utilized bank accounts for saving or investing money.
· Savings Account- A savings account is a type of deposit account that allows account users to save and withdraw money while receiving interest.
· Current Account- A form of deposit account designed for everyday transactions, the current account allows customers to conduct several transactions on a regular basis and withdraw money as many times as needed.
· Fixed Deposits-Fixed deposits are used to save money for the long term. It entitles investors to the interest generated on deposits if the funds are not withdrawn for a set length of time.
· The interest rate on a fixed deposit is greater than that on a savings account and can range from 4% to 7.5 per cent.
· Recurring Deposit Account- A recurring deposit account is a customizable deposit account given by banks to assist customers with regular earnings in saving a predetermined amount each month while receiving interest.
· Demat Account- A Demat account is used to purchase and hold shares electronically. Regular Demat accounts are available to Indian investors, whereas Repatriable Demat accounts are available to non-resident Indians.
Investment Banking Interview questions
Though retail banking and investment banking fall in the same industry, the work of these two banks is entirely different. From customer base to amenities offered, it is entirely different and even the questions asked in an investment banking interview is very much contrasting. Therefore, we have shortlisted some of the common, unexpected and frequently asked questions in an investment banking interview:
1. How do you value a company?
This is a very basic question that is generally asked in every investment banking interview. This helps the interviewer know whether you are clear with the basics of investment banking. Therefore, if you are a fresher, talk about the method that you are well-aware of in-depth and if you have work experience then telling them about the method that you have used in past, is better.
There are two methods to value a company:
· Intrinsic Valuation (discounted cash flow valuation)
· Relative Valuation (comparable/multiples valuation)
2. What is the appropriate rate to use in discounted cash flow valuation in an unlevered DCF analysis?
This can be a separate question or a follow-up question as well based on which method you choose.
The answer to this question needs to be detailed with logic. The free cash flows in an unlevered DCF analysis are pre-debt, so when it comes to the cost of the cash flows, it relates to both the lenders and the equity providers of capital. Hence the discount rate is the weighted average cost of capital.
3. Have you ever calculated or valued a company with negative historical cash flow?
Here the interviewer is trying to have an insight into the work you have done in the previous companies. This helps in understanding the potential of the employee. Therefore, if you know the valuation, then even if you haven’t tried it in your past work, you need to emphasize the fact that you are willing to take up challenges.
4. List the main components of WAC?
Here the interviewer might give you the full form of WAC or might not. This is done solely to check how your attentiveness is and how strong your basics are. Moreover, along with listing the components, it is always better to give a 2-3 lines explanation of it, if you are confident enough.
Along with the above questions, you can also get a few numerical on the spot to solve to have a look at your practical knowledge in this field. Therefore, the key to ace the interview is to be confident and not panic at any question. Keep your basics of the subject strong and have a thorough research one on the job description to be clear with their requirements and skills.
Finally, while preparing for interviews is one thing, getting that interview call is quite another. And one of the most important factors in doing that is a top-class resume/CV.
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