Banking Loan Clerk

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“Banking Loan Clerk Frequently Asked Questions in various Banking Loan Clerk job interviews by interviewer. The set of questions are here to ensures that you offer a perfect answer posed to you. So get preparation for your new job interview”



104 Banking Loan Clerk Questions And Answers

1⟩ Explain what is ‘Crossed Cheque’?

A crossed cheque indicates the amount should be deposited into the payees account and cannot be cashed by the bank over the counter. Two cross-lines on the left side corner of the cheque that indicates crossed cheque.

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2⟩ Please explain what is commercial bank?

Commercial bank is owned by the group of individuals or by a member of Federal Reserve System. The commercial bank offer services to individuals, they are primarily concerned with receiving deposits and lending to business. Such bank earns money by imposing interest on the loan borrowed by the borrower. The money that is deposited by the customer will be used by the bank to give business loan, auto loan, mortgages and home repair loans.

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4⟩ Do you know what is ‘prime rate’?

Basically, ‘prime rate’ is the rate of interest that is decided by nations (U.S.A) largest banks for their preferred customers, having a good credit score. Much ‘variable’ interest depends on the ‘prime rates’. For example, the ‘APR’ (Annual Percentage Rate) on a credit card is 10% plus prime rate, and if the prime rate is 3%, the current ‘APR’ on that credit card would be 13%.

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6⟩ Tell me what are NPAs?

NPA stands for Non-Performing Assets.

Bank gives loans and advances to it's customers. These loans and advances are bank's assets. When the customers don't repay back the bank's money they don't perform. Such assets are known as Non-Permoerming Assets.

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7⟩ Explain what are the different types of banking software applications are available in the Industry?

There are many types of banking software applications and few are listed below

a) Internet banking system: Internet banking allows the customers and financial institution to conduct final transaction using banks or financial institute website.

b) ATM banking (Automated Teller Machine): It is an electronic banking outlet, which allows customers to complete basic transaction.

c) Core banking system: Core banking is a service provided by a networked bank branches. With this, customer can withdraw money from any branch.

d) Loan management system: The database collects all the information and keeps the track about the customers who borrows the money.

e) Credit management system: Credit management system is a system for handling credit accounts, assessing risks and determining how much credit to offer to the customer.

f) Investment management system: It is a process of managing money, including investments, banking, budgeting and taxes.

g) Stock market management system: The stock market management is a system that manages financial portfolio like securities and bonds.

h) Financial management system: Financial management system is used to govern and keep a record of its income, expense and assets and to keep the accountability of its profit.

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10⟩ Tell me what is Cash Reserve Ratio – CRR?

The Cash Reserve Ratio (CRR) refers to the liquid cash that banks have to maintain with the Reserve Bank of India (RBI) as a certain percentage of their demand and time liabilities. For example if the CRR is 10% then a bank with net demand and time deposits of Rs 1,00,000 will have to deposit Rs 10,000 with the RBI as liquid cash.

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11⟩ Do you know what is ‘Bill Discount’?

‘Bill Discount’ is a settlement of the bill, where your electricity bill or gas bill is sold to a bank for early payment at less than the face value and the bank will recover the full amount of the bill from you before bill due date. For example, electricity bill for XYZ is $1000; the electricity bill company will sell the bill to the bank for 10% to 20% discount to the face value. Here, the bank will buy the electricity bill for $900 whose face value is $1000, now the bank will recover, full amount of bill from the customer i.e $1000. If the customer fails to pay the bill, the bank will put interest on the outstanding bill and ask the customer for the payment.

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12⟩ Tell us what ‘LIBOR’ stands for?

‘LIBOR’ stands for London Inter-Bank Offered Rate. As the name suggest, it is an average interest rate offered for U.S dollar or Euro dollar deposited between groups of London banks. It is an international interest rate that follows world economic condition and used as a base rate by banks to set interest rate. LIBOR comes in 8 maturities from overnight to 12 months and in 5 different currencies. Once in a day LIBOR announces its interest rate.

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14⟩ Tell us what are payroll cards?

Payroll cards are types of smart cards issued by banks to facilitate salary payments between employer and employees. Through payroll card, employer can load salary payments onto an employee’s smart card, and employee can withdraw the salary even though he/she doesn’t have an account in the bank.

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15⟩ Tell us what is ‘Credit Check’?

A credit check or a credit report is done by the bank on a basis of an individual’s financial credit. It is done in order to make sure that an individual is capable enough of meeting the financial obligation for its business or any other monetary transaction. The credit check is done keeping few aspects in concern like your liabilities, assets, income etc.

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18⟩ Explain what is Mutual Fund? What is safest type of fund?

Mutual Fund is a pool of fund where investors invests their money for a common objective.

Benefits of Mutual funds

Exempted under section 80(C)

Managed by experts

Index funds are safest because money is invested in all index stocks. The rise or fall of value align with index.

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