Common Bank Interview Questions and How to Answer Them

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

You have a better chance of getting a job offer if you have the right educational background and skills, and you are well-prepared for the bank interview questions and answers. Even if you don’t have much experience, showing that you have the necessary qualifications and can handle tough questions about your skills can make a big difference. Being ready with clear, confident answers helps you stand out. So, focus on showcasing your education, skills, and preparation to increase your chances of success in the interview and receive a job offer.

To answer banking interview questions confidently, practice is essential. By preparing your answers in advance, you can respond more naturally during the interview. Practicing helps you speak clearly and handle common questions with ease. This preparation builds your confidence and leaves a good impression on your interviewers. The more you practice, the more relaxed and prepared you’ll feel. So, take time to go over your answers to typical banking interview questions. This will help you do well and handle the interview smoothly. With proper practice, you’ll be ready to face the interview with assurance.

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 secure the banking job you want, we’ll review some common bank interview questions and answers. We’ll cover the most frequently asked bank interview questions and answers to help you prepare. By familiarizing yourself with these bank interview questions and answers, you’ll feel more confident. Let’s dive into these bank interview questions and answers to get you ready for success in your upcoming interview. Also read about Banking Courses and Career Paths for your knowledge in this topic.

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’

Bank-Related Interview Questions and Answers

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 debt-to-income ratio is an important banking interview question 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: The most crucial bank interview questions and answers is the prime rate, which is essentially the interest rate that a bank loans to its favored 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 are 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

Also Read:- NPA Full Form: Non-Performing Asset [Complete Guide 2024]

In-Depth Bank-Related Interview Questions and Answers 

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 installment 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 installments 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 installments 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 main 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 center for their preparation because these centers 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 analyze 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 bank interview questions and answers will help you pass the selection panel and land a job in the banking industry. Knowing the right bank interview questions and answers can make a big difference. By preparing with these bank interview questions and answers, you’ll be more confident during your interview. These bank interview questions and answers are designed to show your skills and fit for the role. Practice these bank interview questions and answers to improve your chances. With the right preparation, these bank interview questions and answers will help you succeed and get the banking job you want.

Banking jobs are hard to get and usually involve multiple selection rounds. During these rounds, candidates face various bank interview questions and answers to test their knowledge. To succeed, interviewees should focus on understanding the basics of the banking industry. Knowing common bank interview questions and answers is crucial for performing well. Preparing for these bank interview questions and answers will help you showcase your knowledge and skills. Aim to be well-informed about the industry to handle the bank interview questions and answers effectively. Good preparation with bank interview questions and answers increases your chances of getting the banking job you want.

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